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Number of exporting enterprises fell in Canada big time

Christian Fernsby ▼ | June 25, 2020
The number of exporting enterprises fell by 24.8% to 16,513 in April on a year-over-year basis, as the decline observed in recent months continued to accelerate.
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Small and medium-sized exporting enterprises accounted for nearly all the decline. The smallest enterprises (those employing fewer than 50 people and with an export value ranging from $1 million to $24.9 million) were particularly affected.

Topics: Canada

By April, measures to contain the spread of coronavirus, such as physical distancing and the closure of non-essential businesses, had already been in place for several weeks. Canadian businesses involved in exporting goods felt substantial impacts as the measures became prolonged and the global pandemic continued to worsen.

Since January 2019, the earliest month for which monthly data are available, firms located in census metropolitan areas (CMAs) have accounted for over three-quarters of all Canada's exporting establishments. Over this period, the overall number of exporters in CMAs reached its lowest level in April.

The decline in the number of exporters from April 2019 to April 2020 was led by Toronto (-1,471), Montréal (-1,059) and Vancouver (-499), these three CMAs being home to more than two-fifths (44.8%) of all exporting establishments in Canada. In percentage terms, among these three CMAs, Montréal posted the largest decline (-31.2%), followed by Toronto (-26.5%) and Vancouver (-21.6%).

On a regional basis, the number of exporting establishments declined across all provinces and territories in April 2020 compared with April 2019, as nearly 6,000 fewer establishments sold goods abroad. Over one-third (34.3%) of the decline was attributable to a decrease in the manufacturing sector in Ontario, Quebec, British Columbia, and Alberta combined.

The demand for components was affected as production lines in factories around the world were halted. On a year-over-year basis, the number of exporters that sold intermediary manufacturing parts abroad, such as furniture and parts, plastic articles, parts and accessories of motor vehicles, and articles of iron or steel, decreased by over 1,600, a decline of 35.5% from April 2019. Establishments in Ontario were particularly affected, accounting for over half (51.4%) of this decline. In addition, there were 332 fewer firms (-38.3%) that sold motor vehicles abroad.

The number of Canadian enterprises exporting goods to Canada's principal trading partners was substantially lower in April 2020 compared with the same month in 2019. The United States (-4,401) continued to lead the decline in absolute terms.

In percentage terms, the decrease in the number of enterprises that sold goods to Europe was led by Spain (-41.5%), France (-39.8%), Italy (-32.5%), the United Kingdom (-31.9%) and Germany (-24.2%), as cases of COVID-19 reached the hundreds of thousands.

Outside the United States and Europe, fewer enterprises exported goods to Brazil (-30.2%) and Russia (-16.1%), countries that are prominent suppliers of raw materials and manufactured goods. The number of enterprises exporting goods to India fell by 55.8% as the country experienced a nationwide lockdown implemented near the end of March. Meanwhile, 305 fewer firms exported to China as the number of confirmed cases of COVID-19 began to stabilize, a decline of 18.7% from April 2019.