Auto trade deficit with U.S. doubles
Canada’s auto trade deficit almost doubled in the first four months of this year primarily because of a sharp drop in exports of finished cars and trucks, statistics show. Using data from Statistics Canada and Industry Canada, the Canadian Auto Workers union says the trade deficit in the January to April period jumped to $3.7 billion from $1.9 billion in the year-ago period.
The CAW, which represents more than 70,000 workers in the industry, said if the current trend continues for the remainder of the year, Canada’s auto trade deficit will top $10 billion – its worst annual performance on record by far. Last year, the auto deficit hit $6.6 billion. Canada started posting regular monthly deficits in fall, 2006, after steady surpluses for about 15 years. The union says the industry, concentrated in southern Ontario, has lost almost 30,000 jobs since peaking at more than 158,000 in 2001. CAW president Buzz Hargrove said again in a statement today that unless Ottawa steps in to control auto imports and push for fair access of Canadian-made autos to other countries, the deficits and job losses will continue.
“Without an active effort by our government to control this huge and growing trade imbalance, there is little hope for saving Canadian auto jobs,” he added.
The union has been pressing Ottawa for more than three years for action to improve access and control a soaring dollar, which makes Canadian exports more costly and imports from some nations cheaper. Ottawa has countered that it is intent on providing a better investment climate for automakers here through tax cuts and strategic assistance for innovation.
The latest data reveal imports of finished vehicles, parts and bodies for buses and trucks dropped 17 per cent to $23.1 billion from $27.8 billion, but exports slid 25 per cent to $19.4 billion from $25.9 billion in the same four months last year. In assembled vehicles, imports fell 14.6 per cent to $11.3 billion, however exports tumbled 28 per cent to $13.8 billion, leaving the sector with a surplus of only $2.5 billion, down from $5.8 billion.
The sharp decline in the surplus for finished vehicles accounted for the overall rise in the deficit because an improvement in the parts sector could not make up for the slide. In parts, truck and bus bodies, exports fell 18 per cent to $5.6 billion while imports declined 19 per cent to $11.8 billion resulting in a deficit of $6.2 billion and an overall improvement from a shortfall of $7.7 billion in the same period last year.
Tags: auto imports, Auto Trade, canadian auto workers, canadian auto workers union, canadian exports, finished cars, industry canada, investment climate, president buzz hargrove, statistics canada, tax cuts, trade deficit, trade imbalance
