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Products with limited international supply for Canada

Kevin Jiang, March 2020

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Following the outbreak of COVID-19, global supply chains are at the risk of major disruptions. This report provides a cursory analysis of products that have limited international supply for Canada. These products could be especially susceptible and may require extra attention from policy makers to ensure minimum operations and necessities. 

In 2019, Canada imported nearly 10 thousand unique products at the 10-digit level under the Harmonized System (HS) classification. However, due to Canada’s unique trading relationship with the United States and the integrated supply chains between the two countries, the U.S. consistently showed up as one of, if not the largest supplier for these products. Out of products with multiple suppliers, the U.S. was the top supplier for over 5000 products and had import shares of more than 90% in nearly a quarter of them. The other dominant supplier for Canada was China, which was not only the largest supplier for nearly 2000 products, but also had over 90% import share in 120 of them. Other major suppliers include Germany, Italy, and Mexico, where each country was the top supplier for approximately 200 products.

Table 1. Top 5 suppliers for Canadian imports*
(Number of products)
CountryLargest SupplierDominant Supplier**
United States5,4111,259
* Products with multiple suppliers
** More than 90% of import value

In order to focus on the most vulnerable products, this report uses two main criteria, the total number of existing suppliers and the Herfindahl–Hirschman Index (HHI)Footnote 1. The first condition narrows the list down to products with no more than three suppliers. This should be intuitive as products that have fewer existing suppliers are more likely to be exposed to disruptions to supply chains. However, this condition also removes products that have one or more countries accounting for a large proportion of Canadian imports but also have many smaller suppliers (e.g. Canada imported 90% of a product from the U.S. and the remaining 10% from 30 other countries). Thus, the first condition was complemented by an HHI index filter of more than 0.81 to re-include these cases of extreme import supplier concentration. 0.81 was selected as the cut-off because if one country accounted for 90% of the import value, that product’s HHI would be at least 0.92 = 0.81. This step removed over 7600 products, filtering the final list of products down to 2315.

Table 2. Distribution of limited supply products by sector
(No more than three suppliers or HHI > 0.81)
SectorDefinitionNumber of Products
Agri-foodHS 1-24863
Chemicals & FertilizersHS 28, 29, 31-38338
Metals & MineralsHS 25, 26, 68-81316
Wood & paperHS 44-48215
Clothing & TextilesHS 41-43, 50-67122
Transport EquipmentHS 86-89122
MachineryHS 84, 9078
Misc. ManufacturesHS 49, 82-83, 91-9672
FuelsHS 2762
Plastics & RubberHS 39-4060
ElectronicsHS 8534
Pharmaceutical ProductsHS 3019
OtherHS 97-9914
Sub-totalAll HS Chapters2,315

These limited supply products had a total import value of over C$100 billion, representing approximately one-sixth of total Canadian merchandise imports in the past year. The U.S. was again disproportionately present by being the largest supplier for over 1700 products, followed by China (158 products) and Germany (37 products).

More than a third of these limited supply products were in the agri-food sector, primarily concentrated in fish and seafood, meat, dairy, and vegetables. There were over 90 fish and seafood products with limited supply, mostly shipped from the U.S., China, and Vietnam. High value imports include live lobsters and frozen haddock and catfish fillets. Next, there were limited supply of meat (88) and dairy (86) products, which included high value imports like pork and beef from the U.S. and parmesan cheese from Italy. Finally, we also identified 72 vulnerable vegetable products such as lettuce, potatoes, and cabbage, mainly sourced from the U.S. and Mexico.

Pharmaceutical products and medical supplies and equipment are especially likely to run into supply constraints during a pandemic. For Canada, there were 19 limited pharmaceutical products (HS 30) ranging from blood products to influenza vaccines, mainly being imported from the U.S. and Europe. Five scientific instruments and medical equipment (HS 90) were also identified, including defibrillators, which although Canada had 26 different suppliers in 2019, the majority came from the U.S. Other essential products like masks, surgical gloves, and ventilators were not identified as vulnerable in this report due to having a wider range of alternative suppliers. And lastly, while Canada had many suppliers for paper products like paper towels and toilet paper, nearly all its imports came from the United States.

The most dependent products are those for which there is only one supplier. In 2019, there were 394 products for which all imports were sourced from a single country. Again reflecting Canada’s special relationship with the United States; out of all Canadian imports with a single supplier, the United States was the largest sole supplier by far (298 products), with Italy (9 products) and China (8 products) trailing in distant 2nd and 3rd places.

Annex 1. Top 20 imports with single supplier by import value

HSTariff Line DescriptionImport valueHHISupplier
2716000000Electrical Energy 578,291,1001United States
2701120012Bituminous Coal, Metallurgical, Low Volatile, W/N Pulverized, Not Agglomerated 213,666,4171United States
8702902000Motor Vehicules, For The Transport Of 10 To 15 Persons, Including Driver, Nes 138,921,1051United States
0207139100Cuts & Edbl Offal,Of Fowl Of Species Gallus Domesticus,Fresh/Chilled,Nes,W/A Com 138,834,3101United States
8802300017Airplanes & O Aircraft,Multiple Eng,Turbofan,Unladen Wt > 4536 <= 15000 Kg,New 131,335,5551United States
4403230099Logs, Of Fir & Spruce, Any Cross-Sectional Dimension >= 15 Cm, Not Treated, Nes 112,444,5981United States
4805240010Testliner, Recycled Liner Board,Not Convert,Wt<=150 G/M², In Rolls/Sheets,Unctd 108,355,6321United States
1205100020Low Erucic Acid Rape Or Colza Seeds, For Oil Extraction, W/N Broken 98,474,5031United States
0207131000Cuts & Edible Offal,Of Spent Fowl Of The Species Gallus Domesticus,Fresh/Chilled 97,142,3121United States
29012300101-Butene 87,365,6061United States
0203190020Swine Back Ribs, Fresh Or Chilled 50,874,7521United States
4406120000Sleepers, For Railway/Tramway,Not Impregnated,Of Non-Coniferous Wood 48,723,7331United States
0407111100Hatching Eggs, Of Fowls Gallus Domesticus, For Broilers,Within Access Commitment 48,256,3551United States
4403910010Logs, Of Red Oak, Not Treated 35,089,4891United States
0401201000Milk, Not Concentrated & Unsweetened, Exceeding 1% But Not Excd 6% Fat, W/A 31,822,4301United States
2005200010Potato Salad,Not In Airtight Ctnr, Prepr Or Presvd O/T By Vinegar/Acetic Acid 29,803,3291United States
0302130040Salmon, Sockeye,Fresh/Chilled, O/T Of No 03.04, O/T Offal Of Nos 0302.91-0302.99 28,617,4641United States
7204490091Shredded Waste And Scrap Of Iron Or Steel 27,476,7821United States
8704320020Vehicles For The Transp Of Goods,Spk-Ign,Int Combu Pst Eng,Gvw > 10 <= 12 Tonnes 27,016,3921United States
0407211010Eggs,Of Gallus Dom,Fresh,White,Regular,O/T Orgn/Specialty,F Retail/Table,W/A Com 25,954,4831United States

Annex 2. Top 20 concentrated imports with multiple suppliers by import value

HSTariff Line DescriptionImport valueHHITop Supplier
8704310020Vehicles For The Transp Of Goods,Spk-Ign,Int Combu Pst Eng,Gvw > 2.5 <= 5 Tonnes 12,040,844,596 0.92United States
9999999900Low Value Couriers' Shipments 8,843,713,935 0.92United States
2710129099Light Oils And Preparations, Nes 4,510,710,514 0.88United States
8701200011Tractors,Road, New, For Semi-Trailers With A Gvw <=36 Tonnes 3,739,527,222 0.57United States
2711210000Natural Gas, In Gaseous State 3,005,790,511 1.00United States
8802400016Airplanes And Other Aircraft, Passenger, Of An Unladen Weight > 15000 Kg, New 2,492,040,724 0.86United States
7112910090Waste&Scrap Of Gold,Incl Metal Clad W Gold,O/T Sweepings Cont O Prec Metal,Nes 1,641,013,716 1.00United States
2710129039Naphthas, Excluding Aviation Turbine Fuel, Nes 1,542,769,145 0.98United States
8704220010Vehicles For The Transportation Of Goods,Diesel/Semi-Diesel,Gvw >5 But<=10Tonnes 1,497,776,932 0.82United States
2937290000Steroidal Hormones, Their Derivatives And Structural Analogues, Nes 1,070,257,059 0.98Belgium
2601120000Iron Ores And Concentrates, O/T Roasted Iron Pyrites, Agglomerated 1,013,933,408 1.00United States
2710199921Diesel Fuel, For Internal Combustion Engines, Cont By Weight <= 0.05% Of Sulphur 878,980,709 0.84United States
8716100099Trailers And Semi-Trailers, Of The Caravan Type, For Camping, Nes 809,121,853 1.00United States
8702101000Motor Veh,>=16 Persons,Incl Driver,Compression-Ignition Int Combu Piston Engine 701,748,903 0.84United States
8606100010Railway Tank Wagons, Tank Cars And The Like, Not Self-Propelled, Insulated 666,327,846 0.59Mexico
2207201210Ethyl Alcohol,Denatured,Within The Meaning Of Excise Act 2001,For Use As Fuel 652,697,457 1.00United States
3901200000Polyethylene, Having A Specific Gravity Of 0.94 Or More 638,241,874 0.90United States
3902300000Propylene Copolymers, In Primary Forms 613,320,733 0.87United States
3402209011Laundry Detergents, Put Up For Retail Sale 530,772,277 0.97United States
9504500010Video Game Consoles And Machines, O/T Those Of Subheading 9504.30 530,618,713 0.88China
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