Statistics Canada reports that the decline of merchandise imports and exports was largely attributable to the significant decrease in trade of motor vehicles and parts in April.
This was mainly the result of production shutdowns in the auto assembly industry in April because of the shortage of semiconductor chips.
Impact of semiconductor shortage
So far, production disruptions in the Canadian industry because of the shortage have been most significant in April.
Decreased 18.1% to $5.5 billion in April, the lowest level since January 2014.*
- Passenger cars and light trucks decreased 21.3%
- Engines and parts decreased 15.7%
Decreased 22.1% to $6.6 billion in April, the lowest level since February 2012.*
- Passenger cars and light trucks decreased 29.7%
- Engines and parts decreased 20.2%
*Excluding the first wave of the 2020 pandemic
Production in May is expected to be slightly less severely impacted, although more than production in February and March. The semiconductor chip shortage remains fluid, with ongoing adjustments being made to automotive manufacturing operations worldwide.
Semiconductor chips are generally not imported into Canada in large quantities as discrete products. Impacts of the global chip shortage will be more apparent in a variety of other manufactured product categories within the North American Product Classification System, where semiconductor chips are already integrated as important components within intermediate or finished goods.
Canada’s trade balance
Canada’s merchandise trade balance went from a deficit of $1.3 billion in March to a surplus of $594 million in April. The surplus in April was the third in 2021, but its value represented less than 0.6% of the total monthly merchandise trade.
Canada’s merchandise imports fell 4.7%, while exports decreased 1.0%.
Total exports were down 1.0% in April to $50.2 billion, with 6 of 11 product sections posting declines. Excluding the motor vehicles and parts category, exports rose 1.6% in April. In real (or volume) terms, total exports fell 3.5%.