Exports are about 25% of Canada economy. Merchandise Trade drives all aspects of the economy including taxation.

1. MERCHANDISE
TRADE - CANADA -
OCTOBER 2017
BY: PAUL YOUNG CPA, CGA
DATE: NOVEMBER 3, 2017

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Internal Controls
• SME – Financial Planning and Analysis
• SME – Business Strategy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. AGENDA
• Exports by Key Sector
• Trade Deficit (Surplus) by Key Sector
• Trade by key Sector and Country
• Blog – Trade
• Blog – NAFTA
• Blog – Automotive
• Blog – Manufacturing
• Blog – Carbon Tax (Competitiveness)
• Blog – Northern Development
• Blog – Clean Technology

4. EXPORTS BY KEY SECTOR
Source – Stats Canada

5. EXPORTS BY KEY SECTOR
Source – Stats Canada

6. DEFICIT BY KEY SECTOR
Source – Stats Canada or https://www.liberal.ca/realchange/getting-canadian-goods-to-market/
Trade is vital for our economy. It opens markets, grows
Canadian businesses, and creates good-paying middle
class jobs – jobs that pay wages that are 50 percent higher
than industries that are not export intensive. That is good
news for the middle class and the communities they call
home.
Stephen Harper’s approach to trade, however, has failed.
His Conservative government has recorded the largest
trade deficit in Canadian history, and Canadians are paying
the price in lost job opportunities.
While Stephen Harper may sign trade deals, he walks away
from partnering with businesses and entrepreneurs to
ensure they can succeed in new markets and create wealth
and jobs for Canadians.
Properly negotiated and implemented, free trade
agreements are good for the Canadian economy. We will
carefully consider all trade opportunities currently open to
Canada, and explore deeper trade relationships with
emerging and established markets, including China and
India.
We will develop a new export promotion strategy that will
help businesses take advantage of new trade agreements.
- Rebound in both natural resource production and
prices has allow the Canada to reduce its’ trade
deficit. Yet Liberals are not promoting the
development of Natural Resources

7. TRADE SURPLUS(DEFICITS) BY KEY
COUNTRY
Source – Stats Canada

8. EXPORTS / STRENGTH BY SECTOR AND COUNTRY
Source – Export Development Corporation

9. EXPORTS / STRENGTH BY SECTOR AND PROVINCE
Source – Export Development Corporation

10. BMO TRADE ANALYSIS
Source -
https://economics.bmocapitalmarkets.com/economics/econofacts/20171103a/econofacts.pdf

11. BLOG - TRADE
• Link: https://www.slideshare.net/paulyoungcga/global-merchandise-trade-canada-october-2017
• It never seems to amaze me to how little the left understands when it comes to both Trade Agreements and FIPA. The left continues to
call out trade deals and FIPA without truly grasping what is in those agreements.
•
• FIPA –
• http://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/agreements_type-
type_accords.aspx?lang=eng#fipa. Companies are always looking at ways to expand their business as part of their return on
investment. Companies take risk as such it only makes sense there is protection with their various investments. Canada government
has been sued over the years. Canada has lost lawsuits under NAFTA to the tune $215M - http://www.iheartradio.ca/ez-rock/ez-rock-
summerland/nafta-lawsuits-target-canada-most-us-hasn-t-lost-yet-1.2742249. The $215M loss is peanuts when you look at the trade
over the past 23+ years.
•
• Liberal Party of Canada
• The Liberal Party of Canada is in talks with countries like India and China, but there are no trade agreements. In fact, India refuses
to sign FIPA agreement that was negotiated by previous government. You cannot have a trade deal unless you first get a FIPA
agreement.
• Trade Agreements
• Canada exports about one quarter of its GDP or about $550M. Canada needs to trade deals to open new markets for Canadian
companies. These same Canadian companies contribute to wealth distribution via various taxation.
https://www.slideshare.net/paulyoungcga/wealth-distribution-canada-corporate-tax-july-2017.

12. BLOG – NAFTA
• Source - https://www.canadianmanufacturing.com/exporting-and-importing/u-s-congress-report-says-trumps-got-wrong-
nafta-203094/
•
• Minster Freeland comment “Canada maintains it does not have a trade surplus with the U.S., a point Foreign Affairs
Minister Chrystia Freeland routinely uses to illustrate her point that it’s not a good way to measure the success or failure
of NAFTA.
• Trudeau also has sided with Nieto - http://www.cbc.ca/news/politics/trudeau-pena-nieto-mexico-canada-trade-visit-
1.4350828. Nieto is on his way out - http://www.latimes.com/world/mexico-americas/la-fg-mexico-president-20170301-
story.html. Trudeau had common ground with Trump and that was Mexico. Canada has a large trade deficit with Mexico -
https://www.slideshare.net/paulyoungcga/nafta-october-2017 (The deficit is about $10B)
• This comment is ridiculous as the Stats Canada shows a different view when it looks at exports and imports -
https://www.slideshare.net/paulyoungcga/merchandise-trade-canada-august-2017 or http://www.statcan.gc.ca/daily-
quotidien/171005/dq171005a-eng.htm “Exports to the United States were down 1.8% to $32.6 billion in August, notably on
lower exports of unwrought gold. Imports from the United States rose 0.9% to $30.3 billion. As a result, Canada's trade
surplus with the United States narrowed from $3.2 billion in July to $2.3 billion in August. The Canadian dollar
gained 0.5 US cents relative to the American dollar from July to August.
•
• The issue is likely that Canada surplus is driven by shipment of raw materials which Freeland seems to be deflecting off
as part of negotiations.

13. BLOG – AUTOMOTIVE
• https://www.nbcnews.com/business/autos/auto-industry-declares-war-trump-over-nafta-n815996
• Many markets are very integrated in terms of their whole supply chain, especially Automotive. President Trump is
concern with the automotive sector due to fact USA has an automotive trade deficit with Mexico -
http://fortune.com/2017/08/14/trumps-nafta-autos-talks-mexico/.
• The problem is automotive new plants have gone to Mexico as such just killing NAFTA could mean higher duties on
imported cars and trucks from Mexico. The sticker price will go up which means likely higher prices for the
consumer. Here is a look at the Global Automotive Market -
http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/GAR_2017-10-31.pdf
• What is the Solution?
• Mexico needs to face more pressure when it comes to raising the labour rates as part of closing income inequality in
their country - https://www.slideshare.net/paulyoungcga/mexico-income-inequality
• Labour unions need to look at ways to reduce cost for business including pushing government for reforms in areas
like taxation (payroll tax, corporate tax, property tax, hydro rates, carbon pricing and other user fees and tax)
• Global automotive producers also need to refine their executive compensation programs as part of curtailing costs.
• Automotive needs to return to rural areas as part of cost control. Rural areas could then be re-open in terms of
economic development.
• Canada and USA have common ground with automotive as they both have automotive deficits with Mexico.

14. BLOG - MANUFACTURING
• The United States continues to move reforms including regulatory and taxation as part of repositioning the
USA for growth in key sectors like Manufacturing. http://www.industryweek.com/economy/40-increase-us-
manufacturing-
achievable?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IWNews+%28Industry
Week+Most+Recent+News%29&sfvc4enews=42&cl=article_2&NL=IW-07
•
• Canada is going the opposite direction which is more regulation, more taxes including carbon taxation.
https://www.slideshare.net/paulyoungcga/cost-competitiveness-canada-october-2017 . Both Ontario and
Quebec have seen the impact of bad provincial policies on business. Medium income has not growth in
provinces like Ontario and Quebec as they lost key jobs in the manufacturing sector -
https://beta.theglobeandmail.com/report-on-business/economy/census-2016-statscan-
income/article36242392/?ref=http://www.theglobeandmail.com&

15. BLOG – CARBON TAX
• RBC did this report on carbon tax. The issue is RBC is trying to be political correct as they appear to be on the fence with their analysis.
http://www.rbc.com/economics/economic-reports/pdf/other-reports/Carbon_October2017.pdf
•
• The reality is emissions will not go down as that has been proven elsewhere in the world like Australia. Why am I using Australia?
Australia removed carbon tax as it was costing the economy and doing little to reduce emissions -
https://www.slideshare.net/paulyoungcga/australia-vs-canada-october-2017 or http://www.cbc.ca/news/world/australia-s-carbon-tax-
repealed-after-2-years-1.2709642
•
• The other issue missing in the analysis is that carbon tax impact to GDP growth. Carbon tax will take approximately $3B out of the
economy. http://business.financialpost.com/commodities/energy/ottawas-carbon-tax-plan-to-shrink-economy-by-3-billion-hurt-loonie-in-
2018-study
•
• The person is formerly tied to Tides Foundation - https://www.hilltimes.com/2017/08/21/new-environment-natural-resources-policy-
adviser-joins-pmo/116282. Sarah Goodman was with the Tides Foundation - http://www.newswire.ca/news-releases/tides-canada-names-
sarah-goodman-vice-president-business-development-and-services-537415491.html
•
• Many jurisdictions have put pro-green agenda ahead of development of natural resources as such mine rankings for provinces and
territories has fallen over the past few years. https://www.fraserinstitute.org/studies/annual-survey-of-mining-companies-2016
•

16. BLOG – NORTHERN DEVELOPMENT
• https://www.canadianmanufacturing.com/regulation/n-w-t-premier-says-south-stop-calling-shots-northern-development-203703/
•
• McLeod said $2.6 billion in planned investments in offshore exploration disappeared with the onset of Trudeau’s moratorium and
yet Canada hasn’t come to the table with any aid to replace that.
• He said welfare rolls grew in the time since and the population is declining as young people in particular head south to find jobs
that don’t exist in the Northwest Territories.
• Resources and the energy sector account for about 40 per cent of the economy of the Northwest Territories.
•
• Mr. McLeod should be very leery as Trudeau named a new policy adviser to his Natural Resource Policy team. The person is
formerly tied to Tides Foundation - https://www.hilltimes.com/2017/08/21/new-environment-natural-resources-policy-adviser-
joins-pmo/116282. Sarah Goodman was with the Tides Foundation - http://www.newswire.ca/news-releases/tides-canada-names-
sarah-goodman-vice-president-business-development-and-services-537415491.html
•
• Many jurisdictions have put pro-green agenda ahead of development of natural resources as such mine rankings for provinces
and territories has fallen over the past few years. https://www.fraserinstitute.org/studies/annual-survey-of-mining-companies-
2016

17. BLOG – CLEAN TECHNOLOGY
•
• Trudeau is so concerned about pushing his green agenda as such he has forgotten that Canada's rich reserves in the areas of
Lithium, Vanadium and Rare Metals.
•
• You would think PM Selfie would be pushing natural resources, right? That would be wrong as the new member of PM
Selfie's Natural Resources team comes from the Tides Foundation - http://www.newswire.ca/news-releases/tides-canada-
names-sarah-goodman-vice-president-business-development-and-services-537415491.html or
https://www.hilltimes.com/2017/08/21/new-environment-natural-resources-policy-adviser-joins-pmo/116282
•
• Source – Clean Technology - https://www.slideshare.net/paulyoungcga/clean-technology-raw-materials-and-clean-products-
canada-november-2017