Canada–United Kingdom

Publication No. 2012-86-E 16 July 2012

Alexandre Gauthier International Affairs, Trade and Finance Division Parliamentary Information and Research Service

Canada–United Kingdom (Trade and Investment Series)

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The Library of Parliament Trade and Investment series provides information on Canada’s trade and investment relationship with selected countries. Particular attention is paid to bilateral merchandise trade, trade in services, and foreign investment. These publications are prepared by the Parliamentary Information and Research Service, which carries out research for and provides information and analysis to parliamentarians and Senate and House of Commons committees and parliamentary associations.

Publication No. 2012-86-E Ottawa, Canada, Library of Parliament (2012)

CONTENTS

MERCHANDISE TRADE.................................................................................................................. 1 PRODUCTS ..................................................................................................................................... 2 SERVICES AND INVESTMENT ...................................................................................................... 3

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Merchandise Trade

Figure 1 Merchandise Trade

In 2011, Canada–United Kingdom (U.K.) merchandise trade totalled $29.1 billion, comprised of $18.8 billion in Canadian exports to, and $10.3 billion in imports from, the U.K.

$ billions 25

Balance Exports Imports

20

The value of Canada’s exports to the U.K. increased by 14.8% between 2010 and 2011, while the value of Canada’s imports from the country decreased by 3.6%.

15

The U.K. was Canada’s second largest export destination worldwide in 2011, behind the United States. In that year, it was Canada’s sixth largest source of imports globally.

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10 5 0

-10 1991

1994

1997

2000

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2006

2009

Figure 2

Over the 2006 to 2011 period, the value of Canada’s exports to the U.K. grew at an average annual rate of 13.1%, compared to 0.3% worldwide. The value of Canada’s exports to the country as a share of the value of Canada’s total exports increased from 2.3% in 2006 to 4.2% in 2011.

Importance to Canada Average yearly growth (%): 2006–2011 United Kingdom

The value of Canada’s imports from the U.K. decreased at an average annual rate of 1.0% over the 2006 to 2011 period, compared to an increase of 2.4% worldwide. The value of Canada’s imports from the country as a share of the value of Canada’s total imports declined from 2.7% in 2006 to 2.3% in 2011.

14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 -2.00

Share of total trade (%):

World

Exports

Imports

13.1

4.2 3.4 2.5 2.4

2.3

1.5

1.3

1996

2001

2.7

0.3 -1.0

Exp.

At the provincial/territorial level, Ontario accounted for almost 80% of the value of Canada’s exports to the U.K. in 2011, with exports valued at $14.8 billion.

Imp.

2006

4.5 4 3.5 2.3 3 2.5 2 1.5 1 0.5 0

2011

Figure 3 Exports by Province/Territory – 2011

Over the 2006 to 2011 period, the fastest-growing provincial/territorial exporters to the U.K. were Alberta, the Northwest Territories and Saskatchewan, with average annual growth rates of 18.7%, 12.8% and 11.0% respectively.

Sask. 4.1% Alberta B.C. 0.9% 2.3% Quebec 6.6%

Manitoba 0.5%

Atlantic 1.3%

Territories 5.3%

Ontario 79.0%

All figures were prepared using 2011 data, based on Statistics Canada annual figures released in spring 2012. The merchandise trade data are customs-based; the services trade and foreign direct investment data are balance of payments-based.

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Products

Figure 4 Major Export Products – 2011

In 2011, resource-based goods accounted for 70.1% of the value of Canada’s exports to the U.K., with manufactured goods representing the remaining 29.9%. This composition had changed significantly since 2006, when manufactured goods and resource-based goods accounted for 58.3% and 41.7% respectively of the value of Canada’s exports to the country.

$ billions Prec. metals, jewellery, coins Inorganic chemicals Nickel, articles thereof Machinery and equipment Electr., electron., etc.

Canada’s highest-valued exports to the U.K. in 2011 were gold, diamonds and uranium, which together accounted for 73.2% of the value of Canada’s exports to the country. The value of Canadian gold, diamond and uranium exports to the U.K. increased from $3.1 billion, $543.1 million and $768.0 million respectively in 2006 to $11.3 billion, $1.4 billion and $1.1 billion respectively in 2011.

2006

Aircraft and parts

2011

Specialized instruments

0

5

10

15

Figure 5 Major Import Products – 2011 $ billions

In 2011, manufactured goods represented 74.5% of the value of Canada’s imports from the U.K., with resource-based goods representing the remaining 25.5%. This composition had changed somewhat since 2006, when manufactured goods and resource-based goods accounted for 62.7% and 37.3% respectively of the value of Canada’s imports from the country.

Energy and related Machinery and equipment Prec. metals, jewellery, coins Pharmaceuticals Aircraft and parts

2006

Motor vehicles, parts

2011

Specialized instruments Electr., electron., etc.

Canada’s highest-valued imports from the U.K. in 2011 were crude and non-crude oil, which collectively accounted for 26.5% of the value of Canada’s imports from the country. The value of Canadian crude oil imports from the U.K. decreased from $3.9 billion in 2006 to $1.8 billion in 2011, while the value of Canadian non-crude oil imports increased from $114.9 million in 2006 to $990.3 million in 2011.

0

2

4

6

Figure 6 Balance by Category – 2011 $ billions Agriculture and food

In 2011, Canada had a trade surplus with the U.K. in the metals, mines and energy as well as forest products categories, and a trade deficit in all other product categories.

Metals, mines, energy Forest products Machinery and equipment

2006

Transportation equipment

2011

Other manufactured goods Other

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0

2

4

6

8

10

12

All figures were prepared using 2011 data, based on Statistics Canada annual figures released in spring 2012. The merchandise trade data are customs-based; the services trade and foreign direct investment data are balance of payments-based.

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Services and Investment

Figure 7 Services Trade

In 2011, Canada–U.K. services trade totalled $8.9 billion, comprised of $4.1 billion in Canadian exports to, and $4.9 billion in imports from, the U.K.

$ billions 6 5

The value of Canada’s services exports to the U.K. decreased by 1.6% from 2010 to 2011, while the value of Canada’s services imports from the country increased by 5.1%.

4

In 2011, Canada’s trade deficit in services with the U.K. was the result of trade in transportation services and travel services. In that year, Canada imported $2.0 billion and $1.1 billion in transportation services and travel services respectively from, and exported $1.3 billion and $835.0 million in transportation services and travel services respectively to, the U.K. In 2011, Canada had a trade surplus with the U.K. in commercial services and government services.

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Balance

2

Exports

1

Imports

0 -1 -2 1991

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2003

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2009

Figure 8 Services Trade by Type – 2011 $ billions Exports

The stock of Canadian direct investment in the U.K. totalled $83.3 billion in 2011, making it Canada’s second largest destination for foreign investment abroad, behind the United States. Canadian direct investment in the country increased by 0.6% between 2010 and 2011.

Government

Imports

Transportation Commercial

In 2011, the stock of U.K. direct investment in Canada totalled $38.9 billion, making it the third largest source of foreign investment in Canada, behind the United States and the Netherlands. U.K. direct investment in Canada increased by 7.5% between 2010 and 2011.

Travel 0.0

0.5

1.0

1.5

2.0

2.5

Figure 9 Foreign Direct Investment $ billions 90 80 70 60 50 40 30 20 10 0

Canadian investment in the United Kingdom British investment in Canada

1991

1994

1997

2000

2003

2006

2009

All figures were prepared using 2011 data, based on Statistics Canada annual figures released in spring 2012. The merchandise trade data are customs-based; the services trade and foreign direct investment data are balance of payments-based.

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