Pandemic shutdown of auto sector hits Canada trade hard

Agence France-Presse
Pandemic shutdown of auto sector hits Canada trade hard
Canada's total exports fall 29.7% in April 2020, while total imports are down 25.1% – described as 'unparalleled' declines

OTTAWA, Canada – Canada’s trade plunged at a record pace in April, led by a drop in shipments of motor vehicles and parts after the pandemic shut down the auto sector, the government reported on Thursday, June 4.

As a result, Canada’s trade deficit widened to Can$3.3 billion (US$2.4 billion), from Can$1.5 billion in March.

Total exports fell 29.7% to Can$32.7 billion while total imports were down 25.1% to Can$35.9 billion.

“These declines, in both absolute value and percentage, are unparalleled, as monthly decreases of this magnitude have never been observed,” Statistics Canada said.

All auto assembly plants in Canada were shuttered as a state of emergency was declared and restrictions were imposed to slow the spread of the coronavirus.

As such, no new vehicles were manufactured in April. The few vehicles that were exported were from inventories or used.

Most auto assembly plants in North America gradually resumed production in May, “which should lead to increased trade in the coming months,” said Statistics Canada. 

However, due to physical distancing requirements, challenges in restarting supply chains, and low demand for new cars, “a return to pre-COVID-19 production levels is not expected in the near term,” it added.

Exports of energy products also fell by Can$3.6 billion, the largest decrease on record.

This drop was led by a sharp decline in crude oil exports, which fell 55.1%.

Energy imports were also down as confinement measures reduced demand, and refineries were closed.

Because many retail stores were also closed in April, demand for consumer products plummeted too, led by fewer imports of clothing, footwear, and accessories.

A number of retail stores that were closed in April, however, gradually reopened in May.

Imports of medical masks from China, meanwhile, pushed up the carpets and textile furnishings category.

Alcoholic beverage imports, up 9%, also reached a record in April. And there was a rise in pharmaceutical imports.

Total trade with the United States – Canada’s largest trading partner – fell by Can$23.4 billion, representing more than 90% of Canada’s decreased trade activity in April. 

Exports to the United States fell 35.7%, while imports were down 35.3%.

As a result, Canada’s trade surplus with the US narrowed from Can$3.5 billion in March to Can$2.2 billion in April. –

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