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Trade in Services

Canada and Trade in Services

The past decades have seen a broad structural shift towards services in the Canadian economy. Services have increased from just over half of Canada's gross domestic product (GDP) in 1961 to two-thirds today. The percentage of workers employed in services is also on the rise. It employs about three Canadians in four - compared to just over half in 1961 - and between 1992 and 2002 services created about 80 percent of new jobs.

Services are, on balance, more knowledge-intensive than other sectors and therefore employ proportionately many more well-educated workers than other industries. For example, Almost 20 percent* of workers in the services sector have post-secondary education. Interestingly, some of the best-paid jobs in Canada are in the services sector - in financial, legal, advertising, computer software and engineering services.

Services Trade

• Cross-border exports of services totalled $56.6 billion in 2001, representing about 12 percent of Canada's exports. At the same time, Canada imported $65 billion of services.

• In addition to cross-border exports, many services are delivered through affiliates set up in foreign countries to sell services directly to foreign customers. In 1999, sales by foreign affiliates of Canadian services firms were $124 billion, more than twice the amount of cross-border services exports.

• The share of services exports relative to GDP rose steadily during the 1990s. Canada's services exports represented 5.2 percent of GDP in 2001, compared with 4.4 percent in the 1993-1996 period. Services imports have also expanded moderately from 5.8% in 1993-96 to 6.0% in 2001.

• The United States remains Canada's principal trading partner in services, accounting for 59.2 percent of Canada's total services exports in 2001 (compared with 85 percent of goods exports) and 61.8 percent of Canada's services imports.

• However, our services exports are less dependent on the U.S. market than is the case for our goods exports, and our fastest-growing export markets are elsewhere. Between 1992 and 2000, for example, commercial services exports to Brazil grew by 38.3 percent annually; to Chile by 17.6 percent; to China by 14 percent, and 13 percent growth in exports to the U.S.

Sectoral Focus: Commercial Services

• Commercial services exports are the most important and fastest growing sector of services exports for Canada. creating high-paying jobs in knowledge-intensive industries such as architecture, engineering, research and development services and financial services.

• In 2001, commercial services accounted for 49.4 percent of services exports and 49.2 percent of services imports—the largest share of Canada's services trade.

• Exports of commercial services have grown by 8.9 percent since 1995 to total $27.96 billion in 2001.

Source: Statistics Canada, Canada's International Trade in Services, Catalogue no. 67-203-XPB, 2002