Canada Incurs Record $14 Billion Automotive Trade Deficit in 2008, Now in Deficit within North America, CAW Reports

(CAW via CNW Group)

Data newly released from Statistics Canada confirms that Canada experienced its worst-ever year in international trade in automotive products in 2008, according to an analysis from the Canadian Auto Workers union.

Canada’s automotive trade deficit more than doubled last year, to almost $14 billion - an all-time record. The 2007 deficit was $6.6 billion. Canada’s exports of finished vehicles declined dramatically (by almost one quarter) as a result of the financial crisis and resulting collapse of U.S. auto sales.

Imports of auto parts (which are used in Canadian auto factories) also declined. But imports of finished vehicles from offshore grew again (for the fifth straight year), despite the economic crisis.

The aggregate data reveal several worrying trends. For the first time in decades Canada experienced a net auto trade deficit within North America.

Canada’s traditional auto trade surplus with the U.S. plunged to just $4 billion (barely one-fifth the level of three years ago). That surplus with the U.S. no longer offsets Canada’s long-standing auto trade deficit with Mexico (which equaled $4.5 billion last year), leaving a small combined deficit for the NAFTA region as a whole.

Read more here. A detailed table summarizing the 2008 auto trade data is available here.