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Canadian Services Trade in 2000. By Jaime Niño
Jun 9, 2001

In 2000, exports of services reached Canadian $56.3 billion and accounted for 11.9 percent of total exports of goods and services. This figure represented an increase of 8.6 percent over the 1999 figure of Canadian $51.8 billion. The growth rate in 2000 was higher than the 6 percent achieved in 1999. At the same time, imports amounted to $62.8 billion and accounted for 14.7 percent of total imports of goods and services. In turn, imports of services increased 8.6 percent from Canadian $57.8 billion in 1999. This category also includes the Canadian online gambling sector, which significantly contributed to the increase of these numbers thanks to the Canadian online casino games that rank high on the market.

By categories, commercial services exports grew 9.7 percent and reached Canadian $28.8 billion that represents close to 51 percent of total services exports. Travel receipts in turn grew 4.2 percent to Canadian $15.7 billion, representing 28 percent of the total service exports. Transportation services, which presented the largest expansion, increased 13.8 percent to Canadian $10.7 billion and 19 percent of total service exports.

In terms of imports, commercial services grew 7.6 percent to Canadian $30.4 billion or 48.3 percent of total services imports, while travel payments increased 6.7 percent totaling a record Canadian $18 billion. The expansion in tourism spending was generated by the appreciation of the Canadian dollar against the euro that contributed to an increase in travel to European destinations. In 2000,travel payments represented 28.6 percent of total services imports.

Transportation services expanded by 14.4 percent to $13.8 billion or 22 percent of total services imports. This growth reflected the sharp increase in two-way trade in merchandise.

Canada has traditionally been a net importer of services. The largest deficit has traditionally been in the travel and transportation sectors, followed by commercial services. Yet, in recent years the overall deficit has been progressively reduced. In 2000, the deficit in overall services trade was Canadian $6.6 billion (0.6 percent of GDP), which was down from the Canadian $13.6 billion (or 1.9 percent of GDP) in 1993, though up slightly from Canadian $6.1 billion in 1999 (0.6 percent of GDP).

The reduction over the years was due in large part to improvements in the commercial services and travel balances. In 2000, however, Canada’s deficit on the travel account rose for the first time since 1997.

With regard to the direction of Canada’s trade in services, the U.S. remains Canada’s principal trading partner. However, the share of the U.S. in Canada’s two-way trade is smaller for services (61.1 percent) than for merchandise (80.3 percent). Here as well, however, the U.S. is becoming an increasingly important market, accounting for 59.3 percent of Canada’s service exports in 2000 compared to 56.8 percent in 1989.

Source: “Second Annual Report on Canada’s State of Trade” May 2001. Department of Trade

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