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DFAIT / Trade and Economic Analysis Division (EET)
Canada-U.S.: Bilateral Trade and Canada-U.S.: Bilateral Trade and Economic Performance in the Economic Performance in the
1990s1990s
Compiled By:Trade and Economic Analysis Division (EET)
Department of Foreign Affairs and International Trade (DFAIT)
August 1999
DFAIT / Trade and Economic Analysis Division (EET)
Summary SlideSummary SlidePages 2-6 Index
Economic Indicators in Canada and the U.S.A. in the 1990s 8. GDP and employment growth between 1989 and 1998 9. Standard of living between Canada and the U.S.A.10. Provincial share in Canada’s GDP11. Provincial merchandise exports to the U.S.A.12. Share of the U.S. market increased in provincial merchandise exports13. Canada’s terms of trade
14. Sectoral growth in Canada and the U.S.A. 15. Product shares of Canadian goods exports to the U.S.A., 1989 and 1998 16. Labour market performance: Canada and the U.S.A. 17. Average hourly earnings of production workers, Canada and the U.S.A. 18. Distribution of income, Canada and the U.S.A., 1985 and 199519. Taxes and transfers and distribution of incomes in Canada20. UNDP Human Development Index rankings, Canada and the U.S.A.
A Statistical Synopsis of the debate: Why has Canada lagged the U.S. performance?22. Budget deficit/surplus as a share of GDP, Canada and the U.S.A., 1989 - 200123. Annual percentage change in CPI, Canada and the U.S.A., 1989 - 199824. Interest rates, Canada and the U.S.A., 1989 - 1998 25. Total tax revenue as percentage of GDP, Canada and the U.S.A., 1990 - 1996
DFAIT / Trade and Economic Analysis Division (EET)
Summary Slide (cont.)Summary Slide (cont.)26. Sources of revenues and share of GDP, Canada and the U.S.A., 199627. Personal income tax and social security contributions (net of refundable tax credit) as a share of
family income, Canada and the U.S.A., 199828. Federal Government expenditures as a percentage of GDP, Canada and the U.S., 1989 - 200129. Debt to GDP ratio, Canada and the U.S.A., 1989 - 1997 30. Net debt interest payments as a percentage of GDP, Canada and the U.S.A., 1989 - 1997 31. Technology innovations and adoption, Canada and the U.S.A. 32. Research and Development spending, Canada and the U.S.A. 33. Share of gross private investment in GDP, Canada and the U.S.A., 1989 - 1998 34. Labour productivity growth, Canada and the U.S.A., 1989 - 199735. Business sector multifactor productivity, Canada and the U.S.A., 1961 - 199736. Annual growth rate of multifactor productivity
in manufacturing between1990 and 1995, Canada and the U.S.A.37. Expenditures on educational institutions for all levels of education, Canada and the U.S.A., 1993
and 199537. Expenditure per student for all levels of education, Canada and the U.S.A., 1993 and 199539. Employment rates, Canada and the U.S.A.40. Type of job growth, Canada and the U.S.A.41. Unemployment rate by educational attaintment, Canada and the U.S.A., 199842. Unemployment rates by age/sex groups, Canada and the U.S.A., 199843. Incidence and duration of unemployment, Canada and the U.S.A. 44. Brain-drain to the U.S.A.45. Canadian emigration to the U.S.A., 1990 - 1996
DFAIT / Trade and Economic Analysis Division (EET)
Summary Slide (cont.)Summary Slide (cont.)46. Emigration to the U.S.A. and the stock of workers in the Canadian labour force47. Share of recent immigrants into Canada account to population and employment growth in the
high-tech sector
The importance of Canada and the U.S.A. in each other’s economy49. Canada’s trade with the U.S.A., 1989 - 199850. Share of Canadian trade with the U.S.A. in our GDP, 1980 - 199851. U.S. trade flows with Canada as a percentage of U.S. GDP 52. Index of exports of goods and services trade 53. Canada-U.S. trade as a percentage of total Canadian trade, 1980 - 199854. U.S.A. state exports to Canada55. Growth of Canadian exports to the U.S.A., by Industry , 1989-9856. Canada-US exchange rate and Canadian share of North American marlket, 1989 - 199857. Canadian manufacturers’ share in the combined Canada/U.S.A. market, 1989 - 199858. U.S.A. manufacturers’ market share in the combined Canada/U.S.A. market59. Canadian manufacturers’ market share in Canada60. U.S.A. manufacturers’ share of the U.S. market61. Canadian manufacturers’ market share in U.S. industries, 1987-88 to 1993-9462. U.S.A. manufacturers’ market share in Canadian industries, 1987-88 to 1993-9463. Canadian manufacturing industries: Relationship between market share in the U.S.A. and the
share of manufacturing employment, 1987-88 to 1993-94
DFAIT / Trade and Economic Analysis Division (EET)
Summary Slide (cont.)Summary Slide (cont.)64. Changes in the U.S. tariffs and Canadian manufacturers’ share in the U.S. market65. Canada’s agri-food exports, 1988 and 199866. Canada’s agri-food imports, 1988 and 199867. The U.S. share of Canadian agri-food trade, 1988 and 199868. Sales by Canadian-owned affiliates in the U.S.A., 1990-199869. Processed food sales by U.S. affiliates in Canada, 1990-199870. Distribution of sales by U.S. foreign affiliates71. Canada’s two-way services trade with the U.S.A., 1989 - 199872. Canada’s travel account deficit with the U.S.A. has narrowed73. Travel to Canada from the U.S.A. mostly by land74. Canadian direct investment stock in the U.S.A. and U.S. investment stock in Canada, 1989 - 199875. U.S. share in total FDI in Canada and Canada’s share in total U.S. 76. The share of Canada and U.S.A. in total world FDI, 1990 and 199777. The U.S. and Canadian direct investment , share by industry, 1989 and 1998
Human Security and Social Indicators for Canada and the U.S.A. in the1990s79. Health expenditure as a percentage of GDP, Canada and the U.S.A., 1989 and 199680. Murder rate, Canada and the U.S.A., 1989 and 199681. Robbery rate, Canada and the U.S.A., 1989 and 199682. U.S., NATO-Europe and Canadian defence expenditures as a % of GDP83. Defence expenditures per capita, Canada and the U.S.A., 1989 - 1998
6DFAIT / Trade and Economic Analysis Division (EET)
Summary slide (cont’d)Summary slide (cont’d)84. The Canadian defence budget, 1989 - 199985. Defence expenditures in the U.S.A., 1989 - 199986. Canada’s 1997 Top Cultural Commodity Export Markets87. Canada’s 1997 Top Cultural Commodity Import Markets88. Contribution of cultural sector in Canada’s economy89. Canada’s cultural exports by region90. Share of Canadian cultural commodity exports to the U.S.A. by sector, 1997
DFAIT / Trade and Economic Analysis Division (EET)
Economic Indicators in Canada Economic Indicators in Canada and the U.S.A. in the 1990s and the U.S.A. in the 1990s
8DFAIT / Trade and Economic Analysis Division (EET)
Real GDP growth in Canada was 19.1% and in the U.S. 24.6%
90
100
110
120
130
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
1989=100
Employment in Canada grew 9.2% and the U.S. by 12.0%
90
100
110
120
130
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
1989=100
GDP and employment growth between 1989 GDP and employment growth between 1989 and 1998and 1998
U.S.A.U.S.A.
Canada
Canada
Sources: Statistics Canada and U.S. Department of Commerce
9DFAIT / Trade and Economic Analysis Division (EET)
Sources: Statistics Canada and OECD
138.7
125.7
100
110
120
130
140
1989 1990 1991 1992 1993 1994 1995 1996 1997
GD
P p
er c
apit
a (P
PP
), 1
989=
100
Canada
U.S.A.
The gap in the standard of living between The gap in the standard of living between Canada and the U.S.A.Canada and the U.S.A.
10DFAIT / Trade and Economic Analysis Division (EET)
Between 1988 and 1997, the Western provinces Between 1988 and 1997, the Western provinces increased their shares in Canada’s GDP, while increased their shares in Canada’s GDP, while
Ontario, Quebec and Atlantic Canada lost Ontario, Quebec and Atlantic Canada lost relative importance in total GDPrelative importance in total GDP
Source: Statistics Canada
6.5
23.2
41.8
28.6
6.2
21.7
40.5
31.8
0 5 10 15 20 25 30 35 40 45
Atlantic Canada
Quebec
Ontario
Western Canada
Provincial GDP in national total (%)
1988 1997
11DFAIT / Trade and Economic Analysis Division (EET)
Provincial merchandise exports to the Provincial merchandise exports to the U.S.A. increasedU.S.A. increased
Growth rates and 1998 value of exports (in billions)
$0.007
$0.01
$0.4
$1.8
$2.8
$4.5
$5.4
$6.1
$17.1
$25.5
$47.9
$158.5
0 10 20 30 40 50 60 70
Yukon
North West Terr.
Prince Edward Isd
Newfoundland
Nova Scotia
New Brunswick
Saskatchewan
Manitoba
British Columbia
Alberta
Quebec
Ontario
Percent Average Growth, 1989-1998Source: Statistics Canada
12DFAIT / Trade and Economic Analysis Division (EET)
The share of the U.S. market increased in The share of the U.S. market increased in each province’s merchandise exportseach province’s merchandise exports
63.6
81.3
53.6
76.1
92.2
83.3
81.2
80.3
74.2
65.4
3.7
98.1
73.5
48.1
64.5
85.5
71.7
62.7
65.7
67.5
64.3
16.4
2.1
41.4
0 20 40 60 80 100
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Prince Edward Is.
Nova Scotia
Newfoundland
North West Terr.
Yukon
(%)
19981989
Source: Statistics Canada
13DFAIT / Trade and Economic Analysis Division (EET)
Canada’s terms of trade declined in the late 1990s, Canada’s terms of trade declined in the late 1990s, largely due to resource-based commodity prices. largely due to resource-based commodity prices.
However, the decline of the Canadian dollar was also However, the decline of the Canadian dollar was also due to economic conditions in Canadadue to economic conditions in Canada
Sources: Statistics Canada and Bank of CanadaNote: Commodity Price Index 1982-90=100, U.S. dollar terms and Terms of Trade Index, 1992=100
80
85
90
95
100
105
110
115
92-I 92-IV 93-III 94-II 95-I 95-IV 96-III 97-II 98-I 98-IV
Terms of trade & Commodity price
index
0.60
0.65
0.70
0.75
0.80
0.85
0.90
US$ per Canadian dollar
Terms of trade Commodity price Canadian dollar
14DFAIT / Trade and Economic Analysis Division (EET)
The growth in Canada and the U.S. has been dominated by such The growth in Canada and the U.S. has been dominated by such information/knowledge-intensive sectors as financial, services, and information/knowledge-intensive sectors as financial, services, and
wholesale trading, resulting in the declining importance of wholesale trading, resulting in the declining importance of manufacturing, construction and agriculturemanufacturing, construction and agriculture
Percentage Contribution by Industry to U.S. GDP
1.6
1.5
4.1
8.8
6.9
20.4
19.4
1.9
1.8
4.5
8.5
13.6
18.6
6.6
8.3
12.7
17.0
17.6
17.8
9.0
0 5 10 15 20 25
Agriculture, Forestry & Fishing
Mining
Construction
Trasportation and PublicUtilities
Retail Trade
Government
Manufacturing
Wholesale Trade
Services
Finance, Insurance and RealEstate
Percentage Contribution by Industry to Canada's GDP
6.8
6.7
2.4
3.9
5.4
4.5
6.2
6.0
17.8
5.9
12.3
16.5
6.4
7.4
6.6
2.7
3.6
7.3
4.5
6.6
7.2
17.9
5.1
12.1
15.0
5.6
0 5 10 15 20
Educational service
Health and social service
Communications
Agricultural,forestry and fishing
Mining
Construction
Transpo & public utilities
Retail trade
Government
Manufacturing
Wholesale trade
Services
Finance, insurance & real estate
1989
1998
Sources: Statistics Canada and U.S. Department of Commerce
15DFAIT / Trade and Economic Analysis Division (EET)
The growth in knowledge-intensive sectors in the U.S.A. The growth in knowledge-intensive sectors in the U.S.A. has been correlated with increased importance of has been correlated with increased importance of machinery & equipment exports to the U.S.A. We machinery & equipment exports to the U.S.A. We
continue to be major suppliers of autos and resources to continue to be major suppliers of autos and resources to the U.S.A.the U.S.A.
Source: Statistics Canada
Product Shares of Canadian Goods Exports to the U.S. in 1989 and 1998
9.2
11.3
16.6
29.9
5.6
3.3
22.4
10.5
14.4
17.6
33.9
4.8
1.8
16.4
0 5 10 15 20 25 30 35 40
Energy
Forestry
Industrial Goods
Automotive
Agriculture
Consumer Goods
Machinery & equip. 1989
1998
16DFAIT / Trade and Economic Analysis Division (EET)
Labour market performance: in tandem with Labour market performance: in tandem with the U.S.A., high-skill jobs grew more rapidly the U.S.A., high-skill jobs grew more rapidly than other occupations in Canada between than other occupations in Canada between
1989 and 19971989 and 1997
High-skill: managerial, professional and technicalBlue collar: construction, processing, transportation and materials handling
Source: Statistics Canada
-5
0
5
10
15
20
25%
High-skill Sales, serviceand clerical
Blue Collar Total
Can U.S.
17DFAIT / Trade and Economic Analysis Division (EET)
Between 1988 and 1998, North American workers Between 1988 and 1998, North American workers become better off, but the average hourly earnings become better off, but the average hourly earnings of production workers increased by 3.16% in the of production workers increased by 3.16% in the U.S.A. while they rose only by 2.57% in CanadaU.S.A. while they rose only by 2.57% in Canada
Sources: Statistics Canada and Bureau of Labor Statistics
02468
10121416
Average hourly earnings of production
workers
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Canada (C$) U.S. (US$)
18DFAIT / Trade and Economic Analysis Division (EET)
In face of substantial restructuring in Canada, the In face of substantial restructuring in Canada, the distribution of income in Canada, unlike the U.S., has distribution of income in Canada, unlike the U.S., has
remained stable throughout the 1980s and 1990sremained stable throughout the 1980s and 1990s
Canada U.S.A.% of National Income % of National Income
1985 1995 1985 1995
Families in:
Q1 7.0 5.5 4.8 4.5
Q2 12.8 13.0 11.3 10.7
Q3 18.0 17.8 17.4 16.5
Q4 23.9 23.7 24.6 23.8
Q5 38.2 38.2 41.8 44.4
Q9 15.3 15.2 16.5 16.2
Q10 23.0 22.9 25.3 28.2
Source: Statistics Canada
Inequality and Polarization Indicators for Equivalized Family After-Tax Income
19DFAIT / Trade and Economic Analysis Division (EET)
0102030405060708090
100
100 90 80 70 60 50 40 30 20 10
Cumulative distribution of families (%)
Percentage of 1995 National Income
Before tax incomes in 1995
After tax
Taxes and transfers continue to reduce inequality Taxes and transfers continue to reduce inequality of market earnings and results in a more even of market earnings and results in a more even
distribution of incomes in Canadadistribution of incomes in Canada
Source: Statistics Canada
The pushing up of the before-tax income line represents a reduction
in inequality
20DFAIT / Trade and Economic Analysis Division (EET)
Economic growth in the 1990s has allowed the Economic growth in the 1990s has allowed the U.S.A. to catch-up to top-ranked Canada in the U.S.A. to catch-up to top-ranked Canada in the
UNDP Human Development Index rankingsUNDP Human Development Index rankings
Source: United Nations
02468
101214161820
1987 1988 1989 1990 1991 1992 1993 1994 1995
Hum
an D
evel
opm
ent
Ran
king
Canada
U.S.A U.S.A.
Canada
DFAIT / Trade and Economic Analysis Division (EET)
A Statistical Synopsis of the debate: A Statistical Synopsis of the debate: Why has Canada lagged the U.S. Why has Canada lagged the U.S.
performance?performance?
22DFAIT / Trade and Economic Analysis Division (EET)
Canada experienced slower growth in the early Canada experienced slower growth in the early 1990s, in part induced by deficit reduction...1990s, in part induced by deficit reduction...
Source: OECD
(National Account Basis)
-8
-6
-4
-2
0
2
Bud
get
defic
it/su
rplu
s as
a
shar
e of
GD
P
Canada U.S.A.
23DFAIT / Trade and Economic Analysis Division (EET)
……and inflation reduction in the early-90’s; the and inflation reduction in the early-90’s; the Canadian inflation rate has since dropped below Canadian inflation rate has since dropped below
the U.S.the U.S. raterate
Source: U.S. Department of Commerce and Statistics Canada
Annual percentage change in CPI, Annual percentage change in CPI,
U.S.A. and CanadaU.S.A. and Canada
4.8
5.6
1.5
1.9
1.0
1.6
5.0
1.61.62.2
0.2
5.4
4.84.2
3.0 3.0
2.62.3
2.92.8
0
1
2
3
4
5
6
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
% in
fla
tio
n r
ate
U.S.A.
Canada
24DFAIT / Trade and Economic Analysis Division (EET)
Deficit financing and inflation led to higher Deficit financing and inflation led to higher Canadian short and long-term interest rates until Canadian short and long-term interest rates until mid-1990s, before declining below the U.S. rates in mid-1990s, before declining below the U.S. rates in
recent yearsrecent years
Sources: U.S. Department of Commerce and Statistics Canada
Short-term values
12.112.7
8.8
6.6
5.0 5.5
7.1
4.43.5
5.0
0
2
4
6
8
10
12
14
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
% per annumLong-term values
9.910.8
9.88.8
7.98.6 8.4
7.56.5
5.5
0
2
4
6
8
10
12
14
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
% per annum
U.S.A.
U.S.A.
Canada
Canada
25DFAIT / Trade and Economic Analysis Division (EET)
Moreover, Moreover, total taxes in Canada are higher total taxes in Canada are higher than in the U.S.A.,...than in the U.S.A.,...
Source: OECD
Total tax revenue as percentage of GDP at market prices
0
5
10
15
20
25
30
35
40
1990 1991 1992 1993 1994 1995 1996
CanadaU.S.A.
26DFAIT / Trade and Economic Analysis Division (EET)
……and the total tax burden in Canada is higher and the total tax burden in Canada is higher than it is in the U.S.A.,...than it is in the U.S.A.,...
Source: OECD
3.3
13.9
3.2
10.7
9.1
6.0
36.8
4.5
7.0
4.9
2.7
28.5
0 5 10 15 20 25 30 35 40
Other Taxes
Payroll and Social Security
Taxes on Goods and Services
Corporate Income Tax
Personal Income Tax
Total
Source of revenues
% revenues of GDP in 1996
Canada U.S.A.
27DFAIT / Trade and Economic Analysis Division (EET)
……and personal income tax and social security and personal income tax and social security contributions (net of refundable tax credit) as a share of contributions (net of refundable tax credit) as a share of
family income differ in Canada and the U.S.A.family income differ in Canada and the U.S.A.
Income Canada U.S.A.15,00020,00025,00030,00035,00040,00050,00060,00075,000100,000150,000200,000
-33.5-20.8-9.21.59.814.920.424.328.532.036.739.4
-33.8-23.2-11.6-4.9-2.5-1.411.413.716.216.326.129.7
Calculations include:
•Average of Florida, New York and California for the U.S. (1998); and Ontario, Alberta, and British Columbia for Canada.
•Average income of a family of one-earner couple with two children, plus a family of two earner couple with two children.
Data Source: Department of Finance
28DFAIT / Trade and Economic Analysis Division (EET)
Federal Government expenditures as a Federal Government expenditures as a percentage of GDP have fallen in both Canada percentage of GDP have fallen in both Canada
and the U.S.A.and the U.S.A.
Total outlays: current outlays plus net capital outlays.
Data Source: OECD Economic Outlook no.65, June 1999, Preliminary EditionSource: Department of Finance
0
10
20
30
40
50
60
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Cen
tral
Gov
t to
tal e
xpen
ditu
res
as %
of
GD
P
(Nat
iona
l Acc
ount
s)
CanadaU.S.A.
29DFAIT / Trade and Economic Analysis Division (EET)
But Canada’s debt to GDP ratio remains But Canada’s debt to GDP ratio remains above that of the U.S.A.,...above that of the U.S.A.,...
Source: OECD
0
10
20
30
40
50
60
70
80
1989 1990 1991 1992 1993 1994 1995 1996 1997
De
bt
to G
DP
ra
tio
, na
tio
na
l ac
co
un
t b
as
is
U.S.A.
Canada
30DFAIT / Trade and Economic Analysis Division (EET)
…so the Canadian government’s net debt interest so the Canadian government’s net debt interest payments as a percentage of GDP are higher than payments as a percentage of GDP are higher than
in the U.S.A.in the U.S.A.
Source: OECD
0
1
2
3
4
5
6
1989 1990 1991 1992 1993 1994 1995 1996 1997
CanadaU.S.A.
31DFAIT / Trade and Economic Analysis Division (EET)
As regards technology, Canada is slower than As regards technology, Canada is slower than
the U.S.A. in innovations and adoption...the U.S.A. in innovations and adoption...
Source: National Science Foundation
29.6
31.7
1.4 1.6
0
4
8
12
16
20
24
28
32
36
1989 1995
prod
uctio
n, p
erce
ntsh
are
in th
e w
orld
U.S.A. Canada
2.1
30.830.1
2.0
0
6
12
18
24
30
36
1989 1995
cons
umpt
ion,
per
cent
sha
re in
the
wor
ld
U.S.A. Canada
U.S. continues to be a leading producer…. ...and leading consumer of high-tech products, with about
30% share of the global market
32DFAIT / Trade and Economic Analysis Division (EET)
……as Canada’s R&D spending has consistently as Canada’s R&D spending has consistently remained below the U.S.A. levels...remained below the U.S.A. levels...
Source: Statistics Canada
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1989 1990 1991 1992 1993 1994 1995 1996 1997
R&
D e
xpen
ditu
re s
hare
in G
DP
(p
erce
nt)
U.S.A.
Canada
33DFAIT / Trade and Economic Analysis Division (EET)
…….and the importance of gross private .and the importance of gross private investment in Canadian GDP appears to have investment in Canadian GDP appears to have
been limitedbeen limited
Sources: Bureau of Economic Analysis and Statistics Canada
The share of private investment declined to 16.9% in 1998 from 19.5% in 1989
0
5
10
15
20
25
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998% s
hare
of g
ross
pri
vate
in
vest
men
t in
GD
P
U.S.A.
Canada
34DFAIT / Trade and Economic Analysis Division (EET)
A comparison of labour productivity between A comparison of labour productivity between Canada and the U.S.A. presents a mixed pictureCanada and the U.S.A. presents a mixed picture
1.4
2.2
0.6
1.81.5
-1.1
2.9
0.8
3.4
2.7
0.4
-0.2
0.1
0.60.3
1.5
0.60.7
-1.5-1
-0.50
0.51
1.52
2.53
3.54
1989 1990 1991 1992 1993 1994 1995 1996 1997
(%)Canada USA
Source: Statistics Canada
35DFAIT / Trade and Economic Analysis Division (EET)
Technological progress in the business sector Technological progress in the business sector has been comparablehas been comparable
90
100
110
120
130
140
150
160
1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997
Canada USA
Index, 1961=100
Source: Statistics Canada
36DFAIT / Trade and Economic Analysis Division (EET)
Annual growth rate of multifactor productivityAnnual growth rate of multifactor productivity in manufacturing, 1990 to 1995 in manufacturing, 1990 to 1995
0.7
1.4
0.5
-1.0
1.2
1.2
1.1
0.2
1.8
0.1
0.5
1.0
1.0
2.1
1.5
0.9
0.8
1.1
1.4
-0.4
-1.2
0.6
0.3
-0.7
0.2
0.3
1.0
-0.6
0.5
1.4
1.2
3.8
8.3
0.0
1.8
-3.0
-4 -2 0 2 4 6 8 10
Food & beverage
Textiles
Clothing
Wood and lumber
Furnitures
Pulp and paper
Printing
Chemical products
Refineries
Rubber or plastic products
Leather products
Non-metallic mineral products
Primary products
Fabricated metal products
Commercial and industrial machinery
Electrical and electronics products
Transportation equipment
Total manufacturing
Annual % growth
Canada USA
Source: Statistics Canada
37DFAIT / Trade and Economic Analysis Division (EET)
Worker skills: Although expenditures on educational Worker skills: Although expenditures on educational institutions for all levels of education combined is institutions for all levels of education combined is
higher in Canada than in the U.S.A.,...higher in Canada than in the U.S.A.,...
0
1
2
3
4
5
6
7
8
1993 1995 1993 1995
% o
f G
DP
Canada
United States
Total expenditure from both public and private sources
Direct public expenditure
Source: Statistics Canada
38DFAIT / Trade and Economic Analysis Division (EET)
……expenditure per student for all levels of expenditure per student for all levels of education combined rose in the U.S.A. and fell in education combined rose in the U.S.A. and fell in
CanadaCanada
$6,747
$7,744
$6,717
$7,905
$6,000
$6,200
$6,400
$6,600
$6,800
$7,000
$7,200
$7,400
$7,600
$7,800
$8,000
1995 US dollars
1993 1995
Canada U.S.A
Source: Statistics Canada
39DFAIT / Trade and Economic Analysis Division (EET)
Demand for labour: Employment rates in the Demand for labour: Employment rates in the U.S.A. have been much higher than in Canada U.S.A. have been much higher than in Canada
in the 1990s, particularly among older and in the 1990s, particularly among older and younger age groupsyounger age groups
Source: Labour Force Survey, STC
Employment rate
52
54
56
58
60
62
64
66US (age 16+)
Canada (age 15+)
%Employment rate differences
(US minus Canada), 1998
0
2
4
6
8
10
12
14
16
Youths Core age(25-54)
Older (55-64)
Men
Women
% points
40DFAIT / Trade and Economic Analysis Division (EET)
There are striking differences in the type of job There are striking differences in the type of job growth over the 1990s in Canada and the U.S.A.growth over the 1990s in Canada and the U.S.A.
Contribution to employment growth over the 1990s (1989 to 1998)
0
10
20
30
40
50
60
70
80
Self-employed,full-time
Self-employed,part-time
Paid worker,full-time
Paid worker,part-time
US
Canada
%
Source: Statistics Canada
41DFAIT / Trade and Economic Analysis Division (EET)
Adult unemployment rates are lower in the Adult unemployment rates are lower in the U.S.A. than in Canada for all levels of U.S.A. than in Canada for all levels of
educational attainmenteducational attainment
Source: Labour Force Survey, STC
Unemployment rates by educational attainment, age 25+, 1998
0.0
4.0
8.0
12.0
16.0
Total aged25+
Less thanhigh school
High schoolgrad
Some post-secondary
orcertificate
Universitydegree
Canada
USA
%
42DFAIT / Trade and Economic Analysis Division (EET)
The unemployment rate gap persists for all The unemployment rate gap persists for all age/sex groups, but is most pronounced for age/sex groups, but is most pronounced for
male youthsmale youths
Source: Labour Force Survey, STC
Unemployment rates
0
2
4
6
8
10
12
14
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
%
US (age 16+)
Canada (age 15+)
Unemployment rate differences (US minus
Canada), 1998
0123456789
10
Youths Core age(25-54)
Older (55-64)
Men
Women
% points
43DFAIT / Trade and Economic Analysis Division (EET)
Both higher incidence and longer duration Both higher incidence and longer duration contributed to the higher unemployment rate in contributed to the higher unemployment rate in
Canada in the 1990sCanada in the 1990s
Source: Labour Force Survey, STC
Incidence of unemployment (% of labour force becoming
unemployed each month)
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1976
1979
1982
1985
1988
1991
1994
1997
Canada
US
Average Weeks Unemployed
0
5
10
15
20
25
30
1976
1979
1982
1985
1988
1991
1994
1997
US
Canada
44DFAIT / Trade and Economic Analysis Division (EET)
Concerning a brain-drain to the U.S.A….Concerning a brain-drain to the U.S.A….• Less than 2.0% of university graduates settle permanently
in the U.S.A.• Four times as many university graduates come to Canada
from world-wide sources, a disproportionate share with degrees such as Master’s or Ph.Ds
• The data for movement of temporary workers to the U.S.A. are not robust– The count is based on border crossings and fluctuates
with administrative changes• The outflow of permanent and temporary workers is
currently estimated at 15,000 - 20,000 per year. Of these, 8,000 - 10,000 are likely to be university graduates
• This outflow of workers to the U.S.A. is offset by a net annual inflow of 24,500 university trained immigrants
Source: Statistics Canada
45DFAIT / Trade and Economic Analysis Division (EET)
……there appears to be no trend of increase in there appears to be no trend of increase in Canadian emigration to the U.S.A. in the Canadian emigration to the U.S.A. in the
1990s1990s
0
5000
10000
15000
20000
25000
30000
1990 1991 1992 1993 1994 1995 1996
Emigration to the U.S.A.Source: Statistics Canada
46DFAIT / Trade and Economic Analysis Division (EET)
Emigration to the U.S.A. is very small relative Emigration to the U.S.A. is very small relative to the stock of workers in the Canadian labour to the stock of workers in the Canadian labour
forceforce
Annual averagepermanent
emigration to theU.S. (1990-96)
Total stock ofworkers in the
Canadian labourforce (1996)
Permanentemigrationas fraction
of totalstock
Physicians307 59,340 5/1000
Nurses 816 246,800 3/1000
ComputerScientists
139 168,385 1/1000
Engineers527 172,415 3/1000
Managerialworkers
2,347 1,927,760 1/1000
Source: Statistics Canada
47DFAIT / Trade and Economic Analysis Division (EET)
Increase in the number of computer engineers, systems analysts and computer programmers employed, 1991 to 1996
Total increase in the employed labor force 38,290
Increase among 1990-96 immigrants 11,870
% increase accounted forby 1990-96 immigrants 31%
Recent immigrants into Canada account for Recent immigrants into Canada account for 5% of the population, but more than 30% of 5% of the population, but more than 30% of employment growth in the high-tech sectoremployment growth in the high-tech sector
Source: Statistics Canada
DFAIT / Trade and Economic Analysis Division (EET)
The importance of Canada and the The importance of Canada and the U.S.A. in each other’s economyU.S.A. in each other’s economy
49DFAIT / Trade and Economic Analysis Division (EET)
Canada has become more integrated with the Canada has become more integrated with the United States as our trade rose by more than United States as our trade rose by more than
two-fold over ten years….two-fold over ten years….
Source: Statistics Canada
100
150
200
250
300
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Bil
lion
s of
C$
Canada's goods and services exports to the U.S.Canada's goods and services imports from the U.S.
Exports
Imports
50DFAIT / Trade and Economic Analysis Division (EET)
……and as the share of Canadian trade with the U.S.A. and as the share of Canadian trade with the U.S.A. in our GDP rose in our GDP rose
Source: Statistics Canada
Canadian trade flows with the US as a percentage of Cdn GDP
0%
10%
20%
30%
40%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Year
Exp to US as % of GDP Imp from US as % of GDP
51DFAIT / Trade and Economic Analysis Division (EET)
The same trend holds for the U.S.A., but The same trend holds for the U.S.A., but proportionally lessproportionally less
US trade flows with Canada as percentage of US GDP
0.0%
1.0%
2.0%
3.0%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Year
Exp to Cda as % of US GDP Imp from Cda as % of US GDP
Source: Statistics Canada
52DFAIT / Trade and Economic Analysis Division (EET)
Goods and services trade have been growing Goods and services trade have been growing in parallel since 1991in parallel since 1991
Index of Exports of Goods and Services (1980=100)
-100200300400500600700
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
Goods Services
Source: Statistics Canada
53DFAIT / Trade and Economic Analysis Division (EET)
The U.S.A. remains Canada’s largest trading The U.S.A. remains Canada’s largest trading partnerpartner
Source: Statistics Canada
C anadian-U S tra de as a pe rce ntage of all C a nadian trade
0%
20%
40%
60%
80%
100%
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
Year
Sh are o f exp o rts t o US Sh are of im po rts fro m US
54DFAIT / Trade and Economic Analysis Division (EET)
With all states gaining since 1991With all states gaining since 1991
0% 50% 100% 150% 200% 250% 300% 350% 400% 450%
Kentucky
Idaho
Ohio
Kansas
Nebraska
Arkansas
New York
Vermont
California
Maryland
Maine
Mississippi
Nevada
Percent growth from 1991 to 1998
Selected U.S.A. state exports to CanadaSelected U.S.A. state exports to Canada
Source: Statistics Canada
55DFAIT / Trade and Economic Analysis Division (EET)
Growth in Canadian exports to the U.S.A., by Growth in Canadian exports to the U.S.A., by Industry (1989-98) Industry (1989-98)
Source: Industry Canada
0 5 10 15 20 25 30
CLOTHING INDUSTRIES
PRIMARY TEXTILE INDUSTRIES
QUARRY AND SAND PIT INDUSTRIES
FURNITURE AND FIXTURE INDUSTRIES
PLASTIC PRODUCTS INDUSTRIES
LOGGING INDUSTRY
TEXTILE PRODUCTS INDUSTRIES
OTHER MANUFACTURING IND.
ELECTRIC AND ELECTRONIC PRODUCTS INDUSTRIES
WOOD INDUSTRIES
ARICULTURAL INDUSTRIES
FABRICATED METAL PRODUCTS INDUSTRIES
PRINTING, PUBLISHING AND ALLIED INDUSTRY
FOOD INDUSTRIES
CHEMICAL AND CHEMICAL PRODUCTS IND.
MACHINERY INDUSTRIES
RUBBER PRODUCTS INDUSTRIES
NON-METALLIC MINERAL PRODUCTS INDUSTRIES
LEATHER AND ALLIED PRODUCTS IND.
CRUDE PET. AND NATURAL GAS IND.
TRANSPORTATION EQUIPMENT INDUSTRIES
FISHING AND TRAPPING INDUSTRIES
REFINED PETROLEUM AND COAL PROD. INDUSTRIES
BEVERAGE INDUSTRIES
PRIMARY METAL INDUSTRIES
PAPER AND ALLIED PRODUCTS INDUSTRIES
MINING INDUSTRIES
56DFAIT / Trade and Economic Analysis Division (EET)
No evidence to support that the lower exchange No evidence to support that the lower exchange rates help Canadian manufacturers to rates help Canadian manufacturers to gain share in the Canada/US marketgain share in the Canada/US market
4
6
8
10
89 90 91 92 93 94 95 96 97 98% C
anad
a's
shar
e of
Can
adia
n pl
us U
.S. m
ark
et
1.00
1.10
1.20
1.30
1.40
1.50
$C/$US
Canadian share of North American market
Canadian and US dollar exchange rate
Source: Statistics Canada
57DFAIT / Trade and Economic Analysis Division (EET)
Canadian manufacturers have maintained share in Canadian manufacturers have maintained share in the combined Canada/U.S.A. marketthe combined Canada/U.S.A. market
4
6
8
10
89 90 91 92 93 94 95 96 97 98
%Canadian share in combined Canada/U.S.A. market
Source: Statistics Canada
58DFAIT / Trade and Economic Analysis Division (EET)
U.S.A. manufacturers have been losing share U.S.A. manufacturers have been losing share in the combined Canada/U.S.A. marketin the combined Canada/U.S.A. market
75
78
81
84
87
90
89 90 91 92 93 94 95 96 97 98
%
USA share in combined Canada/U.S.A. market
Source: Statistics Canada
59DFAIT / Trade and Economic Analysis Division (EET)
40
45
50
55
60
65
89 90 91 92 93 94 95 96 97 98
Although Canadian manufacturers have been Although Canadian manufacturers have been losing market share in Canadalosing market share in Canada
Canadian share - domestic market%
Source: Statistics Canada
60DFAIT / Trade and Economic Analysis Division (EET)
60
65
70
75
80
85
90
95
100
89 90 91 92 93 94 95 96 97 98
And so have U.S.A. manufacturersAnd so have U.S.A. manufacturers
% US share of the U.S.A. market
Source: Statistics Canada
61DFAIT / Trade and Economic Analysis Division (EET)
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
-1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5
Canada gained market share in US in industries where Canada gained market share in US in industries where US recorded the biggest losses, 1987-88 to 1993-94US recorded the biggest losses, 1987-88 to 1993-94
Rubber products
TotalFurniture and fixtures
Transportation equip.
Chemicals
Paper and allied
Electrical
Clothing
Leather Primary textiles
Machinery
US manufacturers (changes in share - percentage points)
Canadian manufacturers (changes in share - percentage points)
Source: Statistics Canada
62DFAIT / Trade and Economic Analysis Division (EET)
0
5
10
15
20
25
30
35
-35 -30 -25 -20 -15 -10 -5 0
U.S.A. gained market share in Canadian industries U.S.A. gained market share in Canadian industries where Canada recorded losses, 1987-88 to 1993-94where Canada recorded losses, 1987-88 to 1993-94
Furniture and fixtures
Rubber products
Chemicals
MachineryPrimary metals
Leather
TotalTransportation equip.
Electrical
Textiles
US manufacturers (changes in share - percentage points)
Canadian manufacturers (changes in share - percentage points)
Source: Statistics Canada
63DFAIT / Trade and Economic Analysis Division (EET)
Canadian manufacturing industries: Relationship Canadian manufacturing industries: Relationship between market share in the U.S.A. and the share of between market share in the U.S.A. and the share of
manufacturing employment, 1987-88 to 1993-94manufacturing employment, 1987-88 to 1993-94
Market shares in U.S.A. (changes in percentage points)
Manufacturing employment share (changes in percentage points)
-1.5
-1
-0.5
0
0.5
1
1.5
-1 -0.5 0 0.5 1 1.5 2 2.5
Transportation Equip.
Rubber
Wood
Clothing
Tobacco
RefinedPetroleum
Paper
Source: Statistics Canada
64DFAIT / Trade and Economic Analysis Division (EET)
-6
-5
-4
-3
-2
-1
0
-20 0 20 40 60 80
Leather
Machinery
Furniture and fixtures
Transportation equip.
Textile products
Food
Wood
Rubber
Plastic products
Chemicals
Paper & allied
Other
US imports tariffs (changes - percentage points)
Canadian share - U.S.A. market (relative change - per cent)
Changes in the U.S. tariffs and Canadian Changes in the U.S. tariffs and Canadian manufacturers’ share in the U.S. marketmanufacturers’ share in the U.S. market
Source: Statistics Canada
DFAIT / Trade and Economic Analysis Division (EET) 65
Canada’s Agri-Food Exports
Bulk Intermediate Consumer-Oriented
In the agri-food industry, the U.S.A. remains the In the agri-food industry, the U.S.A. remains the leading destination for Canada’s intermediate and leading destination for Canada’s intermediate and
consumer-oriented agri-food exportsconsumer-oriented agri-food exports
Source: Agriculture and Agri-food Canada
5.92
7.60
2.21
5.93
2.73
9.12
0
2
4
6
8
10
12
1988 1998 1988 1998 1988 1998
Billions of C$
Other Countries United-States
DFAIT / Trade and Economic Analysis Division (EET) 66
1.22
2.561.40
2.58
4.86
11.22
0
2
4
6
8
10
12
1988 1998 1988 1998 1988 1998
Billions of C$
Other Countries United-States
Canada’s Agri-Food Imports
Bulk Intermediate Consumer-Oriented
The U.S.A. also remains the principal source for The U.S.A. also remains the principal source for Canadian imports of intermediate and consumer-Canadian imports of intermediate and consumer-
oriented agri-food productsoriented agri-food products
Source: Agriculture and Agri-food Canada
DFAIT / Trade and Economic Analysis Division (EET) 67
The U.S. share of Canadian agri-food trade has The U.S. share of Canadian agri-food trade has increased significantly over the 1988-1998 periodincreased significantly over the 1988-1998 period
10.86
22.65
7.48
16.36
0
4
8
12
16
20
24
1988 1998 1988 1998
Billions of C$
Other Countries United-States
Total Agri-Food Exports Total Agri-Food Imports
31% 54%
57% 61%
69%
43%
46%
39%
Total Agri-Food Exports and Imports
Source: Agriculture and Agri-food Canada
DFAIT / Trade and Economic Analysis Division (EET) 68
0123456789
10
1990 1991 1992 1993 1994 1995 1996 1997 1998
Affiliate Sales
U.S.A. Imports
US $ Billions
Source: Agriculture and Agri-food Canada
Processed Food Sales by Canadian Affiliates in the U.S.A. vs. US Imports from Canada
Sales by Canadian-owned affiliates in the Sales by Canadian-owned affiliates in the U.S.A. have been variable, but they have U.S.A. have been variable, but they have
grown over the 1990-1998 periodgrown over the 1990-1998 period
DFAIT / Trade and Economic Analysis Division (EET) 69
Processed Food Sales by US Affiliates in Canada vs.US Exports to Canada
US $ Billions
Source: Agriculture and Agri-food Canada
Sales by U.S. affiliates in Canada are over twice as large as U.S. Sales by U.S. affiliates in Canada are over twice as large as U.S. processed food exports to Canada, and both are growing. A highly processed food exports to Canada, and both are growing. A highly
integrated and expanded regional market is evidenced by the increase integrated and expanded regional market is evidenced by the increase in both U.S. and Canadian affiliates and the growth in trade between in both U.S. and Canadian affiliates and the growth in trade between
the two countries the two countries
0
2
4
6
8
10
12
14
1990 1991 1992 1993 1994 1995 1996 1997 1998
Affiliate SalesU.S.A Exports
70DFAIT / Trade and Economic Analysis Division (EET)
Mexico
US$5.5 B
In Canada, U.S. affiliates export a higher percentage of their In Canada, U.S. affiliates export a higher percentage of their production to the U.S.A. than do U.S. affiliates in other production to the U.S.A. than do U.S. affiliates in other
countries. In addition, many U.S. affiliates in Canada have countries. In addition, many U.S. affiliates in Canada have product mandates which result in the imports of semi-product mandates which result in the imports of semi-
processed ingredients from the U.S.A.processed ingredients from the U.S.A.
Distribution of Sales by US Foreign Affiliates, 1996
World-wide
US$121.2 B
Canada
US$11.6 B
Local Sales Exports to Other Countries Exports to the US
Source: Agriculture and Agri-food Canada
71DFAIT / Trade and Economic Analysis Division (EET)
With regard to services trade, Canada’s two-way With regard to services trade, Canada’s two-way services trade with the U.S.A. grew by $30 billion services trade with the U.S.A. grew by $30 billion
between 1989 and 1998, mostly on account of between 1989 and 1998, mostly on account of commercial servicescommercial services
Canada's Services Trade with the U.S.
27.7
32.6
0
5
10
15
20
25
30
35
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
bil
lio
ns
of
C$
Exports Imports
Share of Commercial Services to Total Services Trade with the U.S.
47.050.6
48.4
53.3
0
10
20
30
40
50
60
1989 1998
pe
r ce
nt
Exports Imports
Source: Statistics Canada
72DFAIT / Trade and Economic Analysis Division (EET)
Also due to a lower Canadian dollar, Also due to a lower Canadian dollar, Canada’s travel account deficit with the Canada’s travel account deficit with the
U.S.A. has narrowedU.S.A. has narrowed
-8
-3
2
7
12
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
bill
ions
of C
$
Travel exports Travel imports Travel balance
Source: Statistics Canada
73DFAIT / Trade and Economic Analysis Division (EET)
Travel to Canada from the U.S.A. mostly by Travel to Canada from the U.S.A. mostly by landland
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
num
ber
of c
ross
ings Automobile
Plane
Bus
Other including Rail andBoat
Source: Citizenship and Immigration Canada
74DFAIT / Trade and Economic Analysis Division (EET)
Two-way flow of investment between Canada and the Two-way flow of investment between Canada and the U.S.A. was also an important component of the on-going U.S.A. was also an important component of the on-going
integration. Canadian direct investment stock in the U.S.A. integration. Canadian direct investment stock in the U.S.A. and U.S. investment stock in Canada has doubledand U.S. investment stock in Canada has doubled
57
80
60
84
63
86
65
88
68
91
78
103
88
113
95
120
103
132126
147
0
50
100
150
Bill
ions
of
C$
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Canadian Direct Investment to the U.S. (stock)
Direct Investment in Canada from the U.S. (stock)
Source: Statistics Canada
75DFAIT / Trade and Economic Analysis Division (EET)
65.6 67.1
16.7 11.6
0
20
40
60
80
1989 1997
Share (%)
U.S. share to Canada Canada's share to U.S.A.
While the U.S. share in total FDI in Canada has While the U.S. share in total FDI in Canada has remained in the 65-68% range, Canada’s share in total remained in the 65-68% range, Canada’s share in total U.S. FDI has declined to 11.6% in 1997 from 16.7% in U.S. FDI has declined to 11.6% in 1997 from 16.7% in
19891989
Source: Statistics Canada
76DFAIT / Trade and Economic Analysis Division (EET)
The share of Canada and U.S.A. in total world The share of Canada and U.S.A. in total world FDI declined between 1990 and 1997FDI declined between 1990 and 1997
6.5
4.0
20.922.7
0
5
10
15
20
25
1990 1997
% share of world FDI Share of Canada Share of U.S.A.
Source: World Investment Report
77DFAIT / Trade and Economic Analysis Division (EET)
The share of U.S. and Canadian direct investment The share of U.S. and Canadian direct investment has increased in information and knowledge-has increased in information and knowledge-
intensive sectors: our investors are contributing to intensive sectors: our investors are contributing to the restructuring in North Americathe restructuring in North America
3.1
20.4
2.6
23.6
16.2
34.1
0 10 20 30 40 50
Wood and Paper
Energy & MetallicMinerals
Machinery &Transportation Equipment
Finance & Insurance
Services & Retailing
Other Industries
per cent
Canadian Direct Investment to the U.S., Share by Industry Foreign Direct Investment in Canada from the U.S., Share by Industry
Source: Statistics Canada
7.9
18.1
16.8
14.4
10.9
31.9
0 5 10 15 20 25 30 35
Wood and Paper
Energy & MetallicMinerals
Machinery &Transportation Equipment
Finance & Insurance
Services & Retailing
Other Industries
per cent1998 1989
DFAIT / Trade and Economic Analysis Division (EET)
Human Security and Social Human Security and Social Indicators for Canada and the Indicators for Canada and the
U.S.A. in the 1990sU.S.A. in the 1990s
79DFAIT / Trade and Economic Analysis Division (EET)
Health expenditure as a percentage of Health expenditure as a percentage of GDP in Canada has declined slightly GDP in Canada has declined slightly
since 1992since 1992
9.28.6
13.6
11.5
0
2
4
6
8
10
12
14
16
1989 1990 1991 1992 1993 1994 1995 1996
% of GDP
Source: Canadian Institute for Health Information and Health U.S.A.
U.S.A.
Canada
80DFAIT / Trade and Economic Analysis Division (EET)
The murder rate in the U.S.A. has been declining since The murder rate in the U.S.A. has been declining since 1992 but is still much above that of Canada1992 but is still much above that of Canada
Sources: Statistics Canada and the U.S. Federal Bureau of Investigation
7
1.90
2
4
6
8
10
12
1989 1990 1991 1992 1993 1994 1995 1996
Rat
e pe
r 10
0,00
0 po
pula
tion
U.S.A.
Canada
81DFAIT / Trade and Economic Analysis Division (EET)
With a broadly similar trend for the robbery rate in the With a broadly similar trend for the robbery rate in the U.S.A. and CanadaU.S.A. and Canada
202
106.1
0
50
100
150
200
250
300
1989 1990 1991 1992 1993 1994 1995 1996
Rat
e pe
r 10
0,00
0 po
pula
tion
U.S.A.
Canada
Sources: Statistics Canada and the U.S. Federal Bureau of Investigation
82DFAIT / Trade and Economic Analysis Division (EET)
Source Data: SIPRI Yearbook; NATO Publication M-DPC-(98)147
5.8
5.5
4.95.1
4.7
4.34.0 3.7
3.5 3.3
2.22.22.32.32.42.82.93.03.03.1
1.21.31.51.61.81.91.91.92.02.0
0
1
2
3
4
5
6
7
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
% of GDP
U.S.A.
NATO-Europe
Canada
U.S., NATO-Europe and Canadian defence U.S., NATO-Europe and Canadian defence expenditures as a % of GDPexpenditures as a % of GDP
83DFAIT / Trade and Economic Analysis Division (EET)
Source Data: SIPRI Yearbook; NATO Publication M-DPC-(98)14
443 415 388 388 382 359 335 302 278 253
12871225
10741128
1047971
914863 850
804
0
200
400
600
800
1000
1200
1400
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Exp
endi
ture
/Cap
ita
(US
$ 19
90)
U.S.A.
Canada
Defence expenditures per capitaDefence expenditures per capita
84DFAIT / Trade and Economic Analysis Division (EET)
Source Data: Military Balance; SIPRI Yearbook; NATO Publication M-DPC-(98)147
Canadian Defence Expenditures
$12.9$13.5
$12.8 $13.1 $13.3$13.0
$12.5
$11.5
$10.8
$10.0$10.4
8
9
10
11
12
13
14
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Bil
lion
s of
Can
adia
n $
The Canadian defence budget increased The Canadian defence budget increased marginally in 1999marginally in 1999
85DFAIT / Trade and Economic Analysis Division (EET)
Source Data: Military Balance; SIPRI Yearbook; NATO Publication M-DPC-(98)147
United States Defence Expenditures
$304.1$306.2 $305.1$297.6
$288.1
$278.9
$271.4$276.3
$269.8
$280.8
$280.3
250
260
270
280
290
300
310
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Bil
lion
s of
US$
Defence expenditures in the U.S.A. started Defence expenditures in the U.S.A. started rising again this yearrising again this year
86DFAIT / Trade and Economic Analysis Division (EET)
Canada’s 1997 Top Cultural Commodity Canada’s 1997 Top Cultural Commodity Export MarketsExport Markets
Source: Statistics Canada 1997-98 Cultural Trade and Investment Project
Export Market $C %1 United States 1,337,523,706 89.22 United Kingdom 31,453,134 2.13 France 17,251,052 1.24 Japan 14,607,692 1.05 Germany 11,009,849 0.76 Australia 10,585,514 0.77 Netherlands 5,954,964 0.48 Switzerland 4,739,799 0.39 Hong Kong 3,810,981 0.3
10 South Africa 3,799,967 0.311 Mozambique 3,525,583 0.212 Italy 3,419,041 0.213 Ireland 3,348,659 0.214 Ghana 3,252,786 0.215 Belgium 2,848,262 0.2
87DFAIT / Trade and Economic Analysis Division (EET)
Canada’s 1997 Top Cultural Commodity Canada’s 1997 Top Cultural Commodity Import MarketsImport Markets
Source: Statistics Canada 1997-98 Cultural Trade and Investment Project
Import Market $C %1 United States 4,052,230,165 85.32 United Kingdom 162,001,753 3.43 France 152,697,411 3.24 China, P. Rep. 62,153,800 1.35 Japan 42,221,585 0.96 Hong Kong 39,973,531 0.87 Germany 31,296,389 0.78 Ireland 23,780,254 0.59 Italy 22,922,116 0.5
10 Taiwan 14,496,148 0.311 Singapore 14,112,558 0.312 Korea, South 12,647,777 0.313 Canada 12,001,925 0.314 Mexico 9,969,918 0.215 Belgium 8,664,048 0.216 Rest of World 87,387,357 1.8
TOTAL 4,748,556,735
88DFAIT / Trade and Economic Analysis Division (EET)
• The cultural sector grew 13.9% between 1989-90 and 1995-96, outstripping growth in some other key sectors such as transportation and agriculture.
•From 1990 to 1994, the cultural labour force increased by 5.6% while total employment declined 0.5%.•Where as only 60% of total employment in Canada is knowledge-based, 82% of Canada’s cultural sector may be defined as such; creators, managers, professionals and technicians.
* Statistics Canada 1997-98 Cultural Trade and Investment Project‡ Statistics Canada 1994 expenditure based GDP; 1994 labour force
Source: Canadian Heritage
Culture610,000*
Totalemployment13,292,000 ‡
Culture$20 billion*
Total grossdomestic product
$767.5 billion‡
1994-95 GDP 1994-95 Employment
The cultural sector is an important The cultural sector is an important contributor to the economycontributor to the economy
89DFAIT / Trade and Economic Analysis Division (EET)
CANADA'S CULTURAL EXPORTS BY REGION*1997
CANADA'S MERCHANDISE EXPORTS BY REGION 1998
USA 84.72%
Japan 2.8%
Other OECD 2.6%
EU 5.39%
Other coutries 4.5%
USA 89.2%
Asia 2.9%
Americas 0.7%
Europe 6.2%
Africa 1.0%
Source: Statistics Canada; Statistics Canada 1997-98 Cultural Trade and Investment Project
• Overall export growth has been
strong but largely reliant on the
U.S. market
• Similarly, 1997 Statistics Canada
data for cultural exports indicate a
heavy reliance (89%) on the U.S.
market
• Preliminary consultations with
Canadian cultural exporters
indicate that the U.S.A. will always
be the primary destination market
for their goods and services
Canada’s cultural exports by regionCanada’s cultural exports by region
90DFAIT / Trade and Economic Analysis Division (EET)
87.8
3%
98.5
8%
95.6
0%
81.1
6%
100.0
0%
65.3
2% 99.1
4%
91.0
1%
98.7
2%
92.3
7%
89.1
9%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Books
& P
rintin
g S
erv
ices
New
spapers
, Periodic
als
Oth
er
Written M
ate
rial
Music
, V
ideo, S
oft
ware
& O
ther
Record
ing
Printe
d M
usic
Vis
ual A
rt
Arc
hite
ctu
ral P
lans
Desig
n-R
ela
ted G
oods
Advert
isin
g M
ate
rial
Photo
gra
phs &
Mass P
roduced A
rt
Tota
l
Sector
Sh
are
(%
)
World
USA
Source: Statistics Canada, Cultural Trade Report for 1997/1998, May 1998
Share of Canadian cultural commodity Share of Canadian cultural commodity exports to the U.S.A. by sector (1997)exports to the U.S.A. by sector (1997)