Toronto, Ontario – Canada’s automotive trade balance is deteriorating dramatically in 2008, nearly doubling to $3.7 billion in the first four months of 2008 as compared to $1.9 billion for the same period the year before, according to the Canadian Auto Workers Union (CAW). The union said the growing deficit is a reflection of the sharp decline in Canada’s automotive exports to the U.S., combined with a continuing increase in automotive imports from outside the NAFTA region, mostly from Japan, Korea and Europe.
Based on current trends, the CAW is projecting that Canada’s automotive trade deficit will exceed $10 billion for 2008, by far the worst automotive trade performance on record.
“Canada can no longer rely on the U.S. market to bail out our chronic and growing automotive trade deficit outside of NAFTA,” said CAW economist Jim Stanford. “The downturn in the U.S. market, combined with the erosion of the market share of North American manufacturers both in the U.S. and here in Canada, mean that Canada’s automotive trade balance is going from bad to worse.”
CAW president Buzz Hargrove said the widening automotive trade deficit and the loss of tens of thousands of well-paying jobs are “two sides of the same coin”, and that the Canadian automotive industry, including both assembly and parts, has lost a total of nearly 30,000 jobs since peaking in 2001. The CAW is calling on the federal government to reinstitute the principles of the former Canada-U.S. Auto Pact, which requires companies to produce one vehicle in Canada for each vehicle sold here.