Canada Flag Government of CanadaSkip all menus (access key: 2) Skip first menu (access key: 1) Menu (access key: M)Canada Wordmark
 Click for the French language version of this page Click for a 1-800 number providing support for Canadian Economy Online Click for tips (navigation, accessibility, search etc.) Link to the Canadians Gateway website Link to the Canada Site (www.gc.ca)
   Return to the Canadian Economy Homepage Click for a listing of items in this website Click for an alphabetical listing of items in this website
Roll over any menu item for more information Economic Concepts: Balance of Trade


The Current Economy: the very latest information
Families & Workers: cost of living, unemployment, family spending
Money: interest rate, exchange rate, inflation rate
Government & the Economy: federal budget, debt, government policies
International Issues: expenditure, trade relations, agreements, BOP...
About Business: research & analysis by sector, policies & programs
Learn about...
Key Indicators: top 10 key economic indicators
Economic Concepts: definitions, examples and more...Key Economic Events: events that have shaped our economy
Economy Overview: an overview from statistics canada's canada yearbook 2001
Return
Return to the Canadian Economy HomepageTHE ECONOMY"?





Jump to DefinitionHow does it affect Canadians? ExamplesLinks

DEFINITION

The balance of trade is a statement of a country’s trade in goods (merchandise) and services. It covers trade in products such as manufactured goods, raw materials and agricultural goods, as well as travel and transportation. The balance of trade is the difference between the value of the goods and services that a country exports and the value of the goods and services that it imports. If a country’s exports exceed its imports, it has a trade surplus and the trade balance is said to be positive. If imports exceed exports, the country has a trade deficit and its trade balance is said to be negative.

The balance of trade sometimes refers to trade in goods only. The term should not be confused with the balance of payments, which is a much broader statement of international monetary flows, including not only trade in goods and services, but also investment income flows and transfer payments.

HOW DOES IT AFFECT CANADIANS?

If a country exports more goods than it imports, the balance of trade is said to be positive. However, this number alone tells us little about whether a country is doing well or not. A positive or negative balance may simply reflect a change in the relative cost of domestic products compared with international prices. For industries that rely heavily on exports, like the auto sector, a positive balance of trade may reflect a higher international demand, which can mean more jobs in that industry.

EXAMPLES

Typically, Canada has had a positive balance of trade, meaning that it tends to export more than it imports when it comes to goods such as auto parts, electronics and aircraft components. Canada usually carries a large positive balance of trade with the United States, but a negative balance with Japan, the European Union and other OECD countries.

LINKS

Canada's balance of international payments
Source: Statistics Canada
http://www.statcan.ca/english/Pgdb/econ01a.htm

Exchange rate statistics
Source: Bank of Canada
http://www.bankofcanada.ca/en/exchange.htm

 

,
Top of Page
Important Notices