In a surprising turn, Canada has posted a trade surplus of C$3.23 billion for the month of June. This is the highest surplus on record since a figure of C$3.45 billion was registered in September 2008. The record set is all the more impressive given analysts’ prediction that trade would suffer a deficit of about $0.68 in June. Overall imports fell by 1%.
This figure reflects an 8.7% increase in exports that reached a high of C$53.76 billion. Much of this has been attributed to improved exports from the oil and auto sectors. Crude oil export values increased by 25.7% despite a decline in production during April and May.
Motor vehicles and auto parts exports also rose by 14.9% despite continued supply chain problems, particularly those of computer chips. Other manufacturing industries have also been hard hit by supply chain problems brought on by the pandemic. The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) dropped to 56.2 in July. This is from a high of 56.5 in the month of June.
Despite improved domestic demand, material scarcity and delivery delays have been causing backlogs. IHS Markit economist Shreeya Patel however noted that the vaccine rollout and declining Covid-19 case numbers would help boost the manufacturing industry’s performance during the second half of the year.
This optimism may however be dampened by warnings of possible labour action by the Canada Border Services Agency (CBSA) staff. Their union has warned of an intended strike action that will affect Canada’s supply chain through all ports of entry served by their members. A statement by the Public Service Alliance of Canada and Customs and Immigration Union said that CBSA employees would carry out their duties to the “letter of the law”, thereby likely to cause long delays at Canada’s borders.
The strike has been prompted by the failure of CBSA to offer contracts to employees during the last three years. The union is also seeking to have its members achieve parity with other Canadian law enforcement and have improvements made to working conditions that some members have termed toxic.
Though CBSA employees in essential roles cannot participate in strike actions, those in other roles like tax collection may not fall under this category. Shipping firm Maersk has warned that there could be cascading effects on supply chains. Its customers were earlier asked to consider expediting any high profile cargo before 6 August, when the strike action is expected to take effect.
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