Canada and Trade in Services

The past decade has seen a significant shift towards services in the Canadian economy. Services have increased from around 65% of Canada's gross domestic product (GDP) in 2000 to 70% today (2012). The percentage of workers employed in services is also on the rise. It employs about four Canadians in five (78%) – compared to 74% in 2000. Between 2000 and 2012 employment in the services sector grew at an annual rate of 1.8%, while employment in the goods sector grew at an annual rate of only 0.1%.

Services are, on balance, more knowledge-intensive than other sectors, and therefore, employ proportionately many more well-educated workers than other industries. For example, jobs in financial and insurance services and professional, scientific, and technical services are knowledge-intensive, and consequently are among the best paid jobs in Canada. Moreover, employment in these sectors is growing at a faster rate than the whole services sector’s average. 

Services Trade

  • Cross-border exports of services totalled $83.3 billion in 2012, representing about 15.3% of Canada's total exports of goods and services. At the same time, Canada imported $107.8 billion of services in the same year.
  • 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 2010, sales by foreign affiliates of Canadian services firms were $162.4 billion, about twice the amount of cross-border services exports.
  • The United States remains Canada's principal trading partner in services, accounting for  53.4% of Canada's total services exports in 2012 (compared with 73.2% of goods exports) and 58.2% of Canada's services imports. Between 2000 and 2012, the share of Canada’s services exports to the United States has been declining (61.5% in 2000), indicating Canada’s diversification of services exports.
  • Canada’s services exports to its NAFTA partners were $44.1 billion in 2010 while we imported $59.5 billion worth of services. Two-way services trade with the United States, accounted for 97% of Canada’s services trade with its NAFTA partners.
  • Canada is among the largest services exporters in the world. In 2011, Canada was the 18th largest services exporter in the world.

Canada and Key Services Trading Partners

  • Canada’s other trading partners figure prominently in the services picture. In 2000, the European Union imported about $9.6 billion of Canadian services and $14.5 billion in 2012. After the European Union, main importers of Canadian services include Bermuda, China, Hong Kong, Switzerland, Japan and Korea.
  • Canada’s services exports are becoming less dependent on the U.S. market as services export markets are growing elsewhere.

Sectoral Focus: Commercial Services

  • Commercial services exports (total services less travel, transportation, and government services) are the most important and fastest growing sector of services exports for Canada, creating high-paying jobs in knowledge-intensive industries such as management, architectural, engineering, research and development, and financial services.
  • In 2012, commercial services accounted for 60% of services exports and 44% of services imports—the largest share of Canada's services trade.
  • Exports of commercial services have grown 4% annually since 2000 to total $50 billion in 2012.