You almost can’t talk about the Canadian economy without talking about our imports and exports. These make up a large percentage of our GDP, and our government’s profit, which affects everything right down the wire, to national debt and federal taxes. But just what do our imports/exports and the economy have to do with the housing market? That’s just what we’ll look at here, as well as our top 25 imports and exports.
Imports and even more especially, exports, have a huge affect on consumers and the housing market. This is because in hard financial times, such as the past great recession, when countries are not doing well, they need to cut spending; and that includes spending on things such as their imports. During the past recession, when the United States was at their very lowest, the exports going south of the border significantly dried up, as the U.S. struggled to keep each one of their dollars within their country to try and boost productivity once again, and recover from the recession. That in turn, directly affects Canada’s economy because the country is simply making less money, which doesn’t bode well at any time.
When that exact thing happened in 2008, Canada managed to remain largely unscathed because our consumers were in a good shape to support that economy at a time when exports simply could not. It was these consumers (and stimulus policy to encourage them) that flooded into big markets, namely the housing market, and made large purchases that kept the money flowing around the country and allowed us to not feel the effects of the recession all that much. Our housing took a small hit in the early years of the recession, but it was much quicker to continue.
Should the fiscal cliff throw the United States back into a recession, which it will if the political parties can’t come together, it could very well throw Canada into a recession, as Finance Minister Jim Flaherty has stated. And this time, it would likely be much worse. That’s because after four years of being the main supporters of our economy, consumers are tapped out. We simply have far too much debt, so much so that many are now suffering from “debt fatigue” – simply being tired of having too much debt. And with homeowners and homebuyers stretched to their very limits, and another slowdown in exports because the U.S. will undoubtedly tighten up their spending once again, that could spell trouble.
So, what kind of exports are we talking? The below chart shows the top 25 Canadian exports.
Due to chart trouble, unfortunately not all 25 exports made it into the legend portion of the chart, Beginning with crude petroleum oils, and going from largest to smallest, here they are as they appear on the chart:
- Crude petroleum oils
- Cars
- Petroleum gases
- Petroleum oils, refined
- Gold
- Motor vehicle parts & accessories
- Aircraft, spacecraft & launch vehicles
- Unwrought aluminum
- Coal, briquettes
- Mineral or chemical fertilizers
- 6 mm wood sawn or chipped
- Chemical woodpulp
- Wheat and meslin
- Medicaments, packaged
- Turbojets, turbo propellers, and other gas turbines
- Polymers of ethylene
- Iron ores and concentrates
- Colza seeds
- Spark-ignition piston engines
- Diamonds
- Newsprint
- Nickel mattes
- Parts of goods of other aircrafts
- Paper, uncoated for writing, handmade paper
- Swine meat
Of course, in addition to making money by shipping stuff out, our federal government also spends money by bringing stuff in. So, what are our 25 biggest imports? You can see them from the chart below and again, all categories below.
- Cars
- Parts and accessories of motor vehicles
- Crude petroleum oils
- Motor vehicles for transporting goods
- Petroleum oils, refined
- Automatic data processing machines
- Medicaments, packaged
- Transmission apparatus for radio, telephone, and TV
- Spark-ignition piston engines
- Telephones
- Turbojets, turbo propellers, and other gas turbines
- Petroleum gases
- Electronic integrated circuits
- Insulated wires
- Monitors and projectors
- Aircraft parts
- Seats
- Gold
- New pneumatic tires, of rubber
- Appliances for themostatically controlled valves
- Tractors
- Parts suitable for use with spark-ignition engines
- Furniture and furniture parts
- Self-propelled bulldozers, excavators, and road rollers
- Pumps for liquids
So now you know which imports and exports you can look at to get an idea of how Canada’s overall economic health are doing.Just don’t forget that it’s this information, combined with housing market stats, and debt stats, that will tell you just how we’ll fare throughout the next quarter, or the next year.
