Canadians are willing to pay more out of their own pockets to preserve national parks, a new study by a University of Guelph researcher has revealed.

In a first-ever survey examining the economic value placed on Canada's national parks by the general population, Will Wistowsky found that 61 per cent of Canadian households were willing to contribute additional funds to help maintain and complete Canada's national park system.

When people were asked how much more they'd be willing to pay, the average amount was $53 per household, with 47 per cent saying they'd be willing to contribute that amount annually.

Multiply that amount by the Canadian population and it adds up to $374 million in one-time funding plus an annual benefit of $176 million.

"This shows how much all Canadians – both park visitors and non-visitors – value their national parks," said Wistowsky, a doctoral student in the School of Environmental Design and Rural Development.

While his research is not intended to put a price tag on national parks, dollar figures allow officials to talk about the benefits of national parks in comparable and concrete terms, he said.

Previous studies have looked at the value of national parks based on gate receipts, said Wistowsky. But that puts pressure on the parks to focus on boosting revenues by increasing the number of users, which will come at the expense of environmental damage.

"This shows how much Canadians value their national parks regardless of whether they visit them."

Despite Canada having one of the world's oldest national parks system there is little information on their actual economic value to Canadian society, said Wistowsky.

His findings are based on questions added to Parks Canada's 2005 national public opinion poll. He was able to survey more than 1,300 respondents.

When asked why they would contribute more, a majority of people said they wanted these areas protected and available for future generations, said Wistowsky.

Although a majority of Canadians were willing to pay more to preserve the parks, he found the economic value placed on national parks differed slightly among provinces.

People in Ontario and Alberta were willing to contribute the most to preserving parks with an average of $57 whereas those surveyed in British Columbia, Manitoba and Saskatchewan would contribute the least with an average of $46.

Likewise the younger the respondent, the more money he or she was willing to pay. Twenty-year-olds would pay $58 whereas 80-year-olds would pay $47.

Despite these differences, an overwhelming majority of respondents supported the federal government using tax dollars to maintain and protect national parks, said Wistowsky.

About 70 per cent of respondents strongly supported the use of tax dollars to maintain the existing national park system.

"Knowing the value of national parks to Canadians and the factors that influence this value is important when it comes to making informed decisions about the management of these areas today and for future generations."

OTTAWA - If the Canadian federal government proceeds with a free trade agreement with Korea as it has promised to do, the impact on Canadian communities would be disastrous, according to a new study.

The study will be released by the Canadian Auto Workers union at the House of Commons Press Gallery on Wednesday.

The study, "Provincial Employment Effects of Canada-Korea Free Trade," finds the job loss would be most acute in Ontario and Quebec, with an expected loss of approximately 17,400 jobs and 8,300 jobs respectively. Even resource rich provinces like Alberta and British Columbia will be set to lose thousands of jobs.

The study builds upon a report released last month, "Canada's Deteriorating Automotive Trade Performance," which detailed the country's growing automotive trade deficit.

The study will be launched at a press conference in coordination with an all-party lobby effort, as CAW leaders, including CAW President Buzz Hargrove, meet with Members of Parliament from across the country, demanding that they recognize the economic damage a Canada-Korea Free Trade Agreement could cause and bring an end to Canada-Korea FTA talks.

Hargrove will be joined by Quebec Director Luc Desnoyers and concerned elected officials Michael Harding, Mayor of the City of Woodstock and Co-chair of the Ontario Mayors for Automotive Investment, Brian McMullan, Mayor of the City of St. Catharines as well as Windsor City Councillor Ken Lewenza Jr.

According to a new study, in 2006, young adults in rural and small towns were more likely to be homeowners than young adults in Canada's three largest metropolitan areas.

The study, published today in Canadian Social Trends, points to housing costs, which are much higher in Canada's largest metropolitan areas, as the main reason for this gap. The relative scarcity of rental housing in less populated areas may also be a factor, it said.

In Canada, 6 out of every 10 young people aged 25 to 39 in Canada who did not live with their parents owned their own home in 2006, according to the study, which was based on data from the 2006 General Social Survey (GSS).

However, the proportion was highest (71%) among young people in this age group who lived in a rural area or in a small town.

In contrast, 54% of those living in the census metropolitan area of Vancouver and 53% of those living in Toronto owned their own home. The proportion fell to less than one-half (48%) among those living in Montréal.

Overall, three-quarters of young adults aged 25 to 39 who no longer lived with their parents reported in the GSS that owning their own home was very important to them.

However, several factors in the last few years may have had a negative impact on home ownership for young people. These include rising housing prices, particularly in large urban centres, their desire to stay in school longer, and their decision to delay various milestones in life, such as marriage.

Income: A major determining factor

Despite the impact on home ownership rates of various factors relating to individuals themselves, it was household characteristics that mattered most to a person's chances of being a homeowner.

Young adults were most likely to own their own home if they were married and had children, as well as if they had higher household incomes.

The study found that household income is one of the factors, if not the single factor, with the biggest impact on the likelihood of owning a home.

Holding the other factors such as age, highest level of schooling, living arrangements and place of residence constant, the odds of being a homeowner were 1.7 times higher for young adults with a household income of over $100,000 than for those with an income between $50,000 and $80,000.

This association is hardly surprising and reflects results of numerous earlier studies. Obviously, insufficient income represents the major obstacle to home ownership. This was quite apparent when it came to living in larger urban centres.

Just 22% of young adults reporting a household income of less than $30,000 per year were homeowners in 2006. On the other hand, 68% of those with a household income of $50,000 to $80,000 were homeowners, as were 82% of those with an income of $100,000 or more.

Location also made a significant difference. Two-fifths (40%) of young adults who had household incomes of under $30,000 a year but who lived in rural settings were homeowners. This was more than twice the proportion of only 16% among their counterparts who lived in one of Canada's six largest metropolitan areas.

Even for those young people with the highest household incomes ($80,000 or more a year), there was a difference, although not as great. The study found that 78% of these big city dwellers were homeowners, compared with 85% of those living in rural areas and small towns.

Home ownership rates vary with age, living arrangements, employment

The study found, not surprisingly, that home ownership rates increase directly with age, and are strongly associated with living arrangements and employment.

Only 38% of young people aged between 25 and 27 owned their own homes in 2006. This proportion rose to 63% among individuals aged 31 to 33, and 73% among those aged 37 to 39.

Even when all other factors that influence home ownership are held constant, the impact of age remains statistically significant. For example, the odds that people aged 37 to 39 would own their own home were 2.2 times higher than those for individuals aged 25 to 27.

Home ownership also varies strongly according to living arrangements. In 2006, 79% of married young adults who had children owned their own home. This proportion was only 40% among individuals living alone and 33% among lone parents.

GSS data show that even when the impact of income and other factors are held constant, young people with temporary jobs had 40% lower odds of owning their own home than people with permanent employment.

Few recent immigrants own their own home

GSS data show that the number of years spent in Canada since immigration is associated with the probability of being a homeowner.

Almost two-thirds (64%) of young adults born in Canada and no longer living with their parents were homeowners.

However, this was true of less than half (48%) of their counterparts who had immigrated to Canada five to nine years prior to the survey, and of only 20% of immigrants who had arrived in Canada sometime in the five years preceding the 2006 GSS.

The Canadian dollar capped its five-year appreciation against the US dollar by achieving parity late in September. The increase accompanied higher commodity prices, notably record prices for oil and wheat, and a cut in US interest rates. The latter was motivated by the turmoil in financial markets that began in mid-August, and renewed weakness in the US housing market.

In Canada, however, there were few signs that the disruption in some financial markets (notably asset-backed commercial paper) was affecting the real economy. Most importantly, employment jumped 0.3% in September, helping to send the unemployment rate to a 31-year low of 5.9%. Higher commodity and stock market prices in September also pointed to the underlying strength of the economy. Short-term business credit growth was steady, as more bank loans made up for a drop in commercial paper.

The Consumer Price Index fell 0.1% between July and August, largely due to lower gasoline prices. As a result, the annual inflation rate slowed substantially to 1.7% from the 2.2% posted in each of the previous four months.

Much of the drop in gasoline prices reflects an easing in the cost of crude oil over the summer (before surging to new record highs in September). But part of the drop also reflects the stronger Canadian dollar: gasoline prices in Canada fell 7.7%, more than the 4.9% drop in the US. This continues a trend that began when the loonie began its appreciation in 2003: since then, gasoline prices have risen 42% in Canada, while US drivers have seen prices jump 90%. While Canada imports little gasoline directly from the US, the North American market is fully integrated, ensuring that any savings from the exchange rate are passed on to drivers in Canada. Most studies of the impact of the exchange rate on import prices ignore this effect, which has saved Canadians $10.2 billion, or $823 per household on average, over the last five years.

Household demand in Quebec softened over the summer, after pay-equity settlements had fuelled strong gains in the spring. Housing starts fell steadily over the summer, while retail sales in June and July gave back all of their 5% gain in May. The underlying determinants of growth remained strong. Employment grew 0.4% in the third quarter, and unemployment remained at its lowest level on record. Manufacturing sales dipped early in the summer due to temporary declines in oil and metals prices. Since these industries represent 25% of its sales of manufactured goods, Quebec remains well-positioned to profit from the recent rebound in their prices.

British Columbia's resource sector continued to hamper growth. In particular, its forestry products, which account for one-third of its shipments, were hit by a province-wide strike late in July. This was the latest blow to the lumber industry, which has seen shipments tumble 22% in a little over a year. Still, British Columbia's overall employment growth of 2.9% in the past year remained the third highest among the provinces, led by construction. This helped buoy housing starts and retail sales over the summer.

Ontario also continued to shift away from its traditional manufacturing base. It has shed 60,000 factory jobs in the past year. Nevertheless, employment growth has remained close to the national average due to services. Business services led the way with gains of nearly 10%. Education and accommodation and food have also seen employment grow at double-digit rates. Housing starts remained steady into August, but Ontario retail sales in July were the weakest in Canada.

It was the highest year-over-year increase in the all-items index since May 2006, and the sharpest acceleration since February of this year.

Gasoline prices were the primary cause of an increase in the 12-month variation of the Consumer Price Index (CPI) in most provinces.

The year-over-year increase in gasoline prices (+12.7%) owed more to a sudden drop in last year's prices than to any significant developments in the most recent month. Indeed, on a month-to-month basis, gasoline prices barely budged, rising a mere 0.8% from August to September 2007.

On a year-over-year basis, lower prices for natural gas and computer equipment and supplies partially offset the impact of gas prices.

Excluding energy, consumer prices advanced 2.1%, compared with the 2.3% annual rate of growth posted in August.

The Bank of Canada's core index, used to monitor the inflation control target, rose by 2.0% between September 2006 and September 2007, a deceleration from the rate of 2.2% posted in August 2007. This was the lowest rate of growth in the core CPI since August 2006.

On a month-to-month basis, the all-items CPI rose 0.2% between August and September 2007, after declining 0.3% between July and August. This increase was due primarily to a rise in prices for women's clothing, the purchasing and leasing of passenger vehicles and the cost of postsecondary education.

The CPI excluding energy advanced 0.2% between August and September, after posting no growth in the previous month. The core index rose 0.4%, compared with a 0.1% rate of growth in the previous month.

12-month change: Higher gasoline prices exert strong upward pressure

Gasoline prices were the main factor behind the 2.5% climb in consumer prices between September 2006 and September 2007.

Prices at the pump were 12.7% higher in September than they were in September 2006. This was the fastest rate of growth since July 2006 and was due to a sharp drop in gasoline prices in September 2006. On a monthly basis, pump prices remained relatively stable between August and September this year, rising a moderate 0.8%.

Owned accommodation cost also pushed up the 12-month change in the CPI in September, rising 4.8%. Homeowner's replacement cost, which represents the worn-out structural portion of housing, and mortgage interest cost were the primary drivers of the increase in costs to Canadian homeowners.

Over time, mortgage interest cost has become an increasingly important driver of the overall change in owned accommodation. Between September 2006 and September 2007, mortgage interest cost rose by 6.4%, compared with 6.1% in August. This is the highest rate of growth since June 1991.

Homeowners' replacement costs were 5.2% higher in September than they were a year earlier. However, this component's contribution to owned accommodation has been tapering off.

Housing costs also accelerated, due to a 2.1% increase in the price of electricity and a 9.0% rise in the price of water.

Food prices rose 1.9% in September compared with September 2006, primarily the result of a 3.3% year-over-year increase in the price of food purchased from restaurants. This increase was partially offset by declines in the price of fresh vegetables and fresh fruit.

On the other hand, consumers got some relief from a decline in natural gas prices. These fell 7.6% in September compared with September 2006, following a moderate increase of 0.6% in the previous month.

Also moderating the increase in consumer prices were declines for computer equipment and supplies (-13.9%), the purchasing and leasing of vehicles (-1.0%), fresh vegetables (-9.2%), fresh fruit (-4.2%), women's clothing (-3.4%) and video equipment (-9.7%).

Price increases higher than national average in four provinces

On a year-over-year basis, consumer prices increased at a faster pace than the national average in only four provinces in September: New Brunswick (+2.9%), Manitoba (+2.8%), Saskatchewan (+3.8%) and Alberta (+4.6%).

The CPI accelerated in every province except Alberta, where the increase eased off slightly from the 12-month change of 4.7% in August. This was the lowest level of growth in consumer prices in Alberta since the beginning of the year.

The primary cause of the slowdown in Alberta was a 28.7% year-over-year decline in natural gas prices and a deceleration in the cost of owned accommodation.

Gasoline was the main factor in the increase in the CPI for most provinces. Gas price increases ranged from a hefty 18.4% in Alberta to a more moderate 3.2% in New Brunswick. The only provinces where drivers did not face double-digit growth were British Columbia, Newfoundland and Labrador, Prince Edward Island and New Brunswick.

In New Brunswick, a 17.9% jump in the year-over-year price of electricity drove the growth of the CPI above the national level.

Much of the variation in the 12-month CPI among the provinces was due to differences in the change of costs for owned accommodation. Owned accommodation continued to be a principal source of growth in consumer prices in September, primarily because of increases in homeowners' replacement cost and mortgage interest cost.

In Saskatchewan, homeowners' replacement costs shot up 44.8% between September 2006 and September 2007. This compares with increases of 13.0% for homeowners in Alberta, 8.3% in Manitoba and 7.6% in Nova Scotia. The year-over-year growth for all other provinces was below the national average (+5.2%).

Month-over-month: Price of women's clothing pushes monthly CPI ahead

The main factor in the 0.2% increase in consumer prices between August and September 2007 was a 5.9% increase in the price of women's clothing, caused by the arrival of the new women's collections in retail outlets.

It was accompanied by a 1.1% increase in the price of purchasing and leasing of passenger vehicles. This was the result of a decrease in incentives offered by car manufacturers in September.

The cost of a obtaining a postsecondary education also drove up consumer prices between August and September. Students paid 3.0% more for their tuition fees in 2007. Higher tuition fees in Ontario (+4.1%) explained most of the upward trend in this index.

Also exerting upward pressure, but to a lesser extent, were a 0.8% increase in mortgage interest cost, a 0.8% gain in gasoline prices and a 2.3% increase in the cost of child care.

These price increases were partially offset by declines for fresh vegetables (-8.9%), air transportation (-4.9%), fresh fruit (-6.4%) and natural gas (-2.3%). The decline in natural gas prices was due largely to a 14.2% drop in the price for natural gas in Alberta from August to September.

The month-over-month price of vegetables contracted for the seventh consecutive month, following a surge in fresh vegetable prices in February.

A substantial 15.7% decline in the price of potatoes between August and September, as a result of seasonal factors, was the primary cause for the decrease in fresh vegetable prices.

World News - “The risk of a disorderly adjustment of global ­economic imbalances has increased after the turmoil in credit markets, Rodrigo Rato, Managing Director of the International Monetary Fund (IMF), on Monday said. … [He] said the IMF’s ­official position, based on staff analysis of medium-term equilibrium exchange rates, was that the dollar was still ‘overvalued’. …

Rato argued that the increased vulnerability was due to financial conditions rather than the underlying evolution of imbalances, which he said had ‘not got worse’. …Rato said the world’s big economies needed to step up their strategies to reduce vulnerability to a disorderly adjustment of imbalances that could lead, for instance, to a sharp fall in the dollar with an accompanying rise in risk premiums and interest rates on US assets. …” [The Financial Times (UK)]

National Post writes that “…Rato, speaking ahead of the fall meetings of the IMF and World Bank, said the Euro was very near an ‘equilibrium’ value, and he repeated a long-standing IMF call for China to allow greater flexibility in its Yuan currency. …” [National Post (Canada)/Factiva]


WSJ writes that “…IMF officials say his remarks were meant to convey, more accurately, the Fund's view of the dollar and didn't reflect any pressure from the US Treasury or European Finance Ministries. ‘There's still some depreciation to come in the medium term,’ said the Fund's Chief Economist, Simon Johnson. …” [The Wall Street Journal/Factiva]

Household demand remained the driving force behind growth. The housing index leapt by 5.3%, its largest gain in almost six years, due to higher housing starts. Spending on durable goods also accelerated. Strong consumer demand for services was the largest contributor to the growth of services employment.

Financial market conditions improved in September after slowing over the summer. The stock market rebounded 1% due to widespread gains.

The manufacturing sector remained mixed, with new orders rising, the average workweek declining and the ratio of shipments to inventories remaining unchanged for a second straight month.

The US leading indicator also was unchanged. Housing market conditions deteriorated late in the summer. Instead, exports and business investment took the lead in growth.

Leading indicators
	April 2007	May 2007	June 2007	July 2007	August 2007	September 2007	Last month of data available
							% change
Composite leading indicator (1992=100)	225.1	226.3	227.0	227.8	228.4	229.3	0.4
Housing index (1992=100)1	145.1	147.7	146.4	148.5	149.4	157.3	5.3
Business and personal services employment (thousands)	2,827	2,836	2,842	2,851	2,853	2,866	0.5
S&P/TSX stock price index (1975=1,000)	13,114	13,344	13,518	13,683	13,782	13,918	1.0
Money supply, M1 ($ millions, 1992)2	163,138	163,100	163,530	164,367	165,492	166,534	0.6
U.S. Conference Board leading indicator (1992=100)3	126.9	126.9	126.8	126.8	127.1	127.1	0.0
Manufacturing
Average workweek (hours)	38.5	38.5	38.5	38.5	38.5	38.4	-0.3
New orders, durables ($ millions, 1992)4	26,808	27,087	27,065	26,909	26,816	26,891	0.3
Shipments/inventories of finished goods4	1.82	1.84	1.85	1.84	1.84	1.84	0.005
Retail trade
Furniture and appliance sales ($ millions, 1992)4	2,624.8	2,633	2,651.8	2,677.8	2,693.6	2,726	1.2
Other durable goods sales ($ millions, 1992)4	8,865.8	8,949.6	9,032.8	9,138	9,170.6	9,221.2	0.6
Unsmoothed composite leading indicator	226.7	228.5	229.0	229.4	228.4	231.3	1.3
1. Composite index of housing starts (units) and house sales (multiple listing service). 2. Deflated by the Consumer Price Index for all items. 3. The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the month immediately preceding. 4. The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the second preceding month. 5. Difference from previous month.

The characterization of Canada's resource sector as "hewers of wood and drawers of water" is outdated, according to a new article that challenges several myths about the nation's resource base.

The article, published in Canadian Economic Observer, shows that the economy has rediscovered its resource base over the last five years, thanks to an historic surge in commodity prices now in the midst of their longest and strongest upswing ever.

The article focuses primarily on export earnings and prices, which capture the magnitude of the surge in commodity demand more than the volume of output or employment.

It shows that since 2002, there has been a large shift in the resource sector away from trees and water. Metals and energy products found underground now drive the growth of resources. Oil output has shifted from conventional oil and gas to the oilsands. Precious metals are more dependent on diamonds, as gold mines are depleted. Grain producers are moving from wheat to canola in response to changing consumer tastes.

As a result, it is more accurate—if less catchy—to say that Canadians are "conveyers of crude and moilers of metals."

The surge in commodity prices started in 2003 in the energy sector, where prices doubled before leveling off in 2005. By 2005, the boom became more pronounced for metals, where prices more than tripled between 2002 and 2006. By 2006, the upswing had spread to agricultural products, where a doubling for grain boosted farm prices by 50%.

While the details for each commodity are different, one common theme is a global economy in its fastest five-year period of growth since 1970. China's manufacturing growth, with a concomitant demand for natural resources used as inputs, has been particularly important.

The article also debunks the myth that Canada exports too many of its metal ores without further processing them. It found that industries such as metals and grains are leaders in adding value here in Canada.

Commodity boom began in energy sector

The commodity price boom began in the energy sector. At the start of 2003, energy exports were only Canada's fourth-largest export group. Quarterly revenues from crude oil and natural gas exports were nearly equal, at just over $4 billion.

Over the next three years, natural gas grew faster than crude oil, largely due to stronger prices. By late 2005, energy products were Canada's most lucrative export.

However, since 2005 these two energy industries have gone in markedly different directions. Crude oil exports have jumped a further 50%, as record-breaking prices were reinforced by new projects coming on-line.

Meanwhile, natural gas prices and production have plummeted, as a mild North American winter in 2006 created a surplus of inventories that still persists.

Compounding the problems of the Canadian gas industry has been the sudden emergence of liquefied natural gas (LNG) as an alternative source in US markets. LNG imports into the United States rose 58% in the first seven months of 2007 compared with the same period in 2006.

This US$1.6-billion increase was matched exactly by a drop in Canada's natural gas exports to the United States over the past 12 months. The growth in LNG reflects improvements in transportation facilities as well as the construction, in the United States and supplying countries, of terminals that convert it from gas to liquid and back to gas.

Overall, exports of other energy products (including hydro-electricity) have changed little since 2002.

Price increase for metals "stronger for longer" than even energy

Metals prices quickly followed energy in taking off after 2002, although the increase for metals has been "stronger for longer" than even energy.

Prices for a wide range of metals have set new records, including nickel, copper, zinc, and iron ore. Non-metallic minerals also have soared, notably potash, uranium and diamonds. Altogether, metals and minerals account for the bulk of exports of industrial goods.

Largely as a result of higher prices, industrial goods have become Canada's leading export. The turnaround was most pronounced for metal ores and alloys, where exports have doubled in four years after almost a decade of no growth.

One myth is that Canada exports too many of its metal ores without further processing them. Supposedly, this costs the economy by not "moving up the value chain." However, it is not a good description of how the mining industry operates in Canada.

In 2006, Canada exported $40 billion of metal alloys (which are ores refined to a finished or semi-finished state), compared with $11 billion of ores which require smelting and refining.

What is less well known is how much metal Canada imports for further processing. Overall, Canada imported nearly $10 billion of metal ore in 2006. About one-third was gold, mostly from Latin America, which was refined in Canada and then shipped to the UK. Another 15% was alumina, used as an input in the production of aluminum, most of which was exported. At $9.5 billion, aluminum was Canada's leading metal export in 2006.

The lesson to be drawn is that metal ore is processed in Canada when the economics justify firms doing so, regardless of where it is mined.

Farming, fishing and forestry

Agriculture and fishing have long been major components of Canada's resource sector, and remain by far the largest employers in this sector.

Still, low prices and supply disruptions (notably the moratorium on cod fishing and the "mad cow" outbreak) depressed incomes for much of the last two decades, leaving agricultural exports the smallest in the resource sector for much of this period.

Agricultural markets improved sharply in 2006 and 2007. Grain exports nearly doubled in value from their drought-affected low in 2005. The largest increase was for wheat, where prices hit a record US$9 a bushel in the summer of 2007.

Canola is the fastest-growing grain export, notably in oil form as consumers shift away from trans fats. Since 2002, exports nearly doubled to a record $1.8 billion in 2006 and are set to break that mark in 2007.

Fish exports have nearly doubled since 1990 despite the collapse of the cod industry in the early 1990s. The industry has adapted, most notably by accelerating the switch from groundfish to crustaceans (such as crabs, lobster and shrimp) and molluscs.

By the 2000s, exports of shellfish had grown to over $2 billion, accounting for well over half of all fish exports. This was four times higher than their level in 1991.

The decline of forestry exports in absolute terms has significantly lowered the relative importance of forestry products. As recently as 1998, they were Canada's largest resource export, ahead of metals, energy and agriculture. But by the first half of 2007, they trailed the other three.

As a result, the share of forestry products slid from 10.8% of total merchandise exports in 1998 to just 6.5% by mid-2007. Forestry had accounted for 18% of exports in 1978.

Resource boom reflected in higher output and jobs

Much of the recent growth in resource incomes has been driven by higher prices. Still, the resource boom has also been reflected in increased real output and employment in this sector. But output in some sectors has been more responsive to higher prices than others.

In volume terms, output in the primary sector, which increased 11.8% from 2002 to mid-2007, has not kept pace with the overall economy, which went up 13.7% in the same period.

In terms of employment, however, the primary sector has grown marginally faster than the total (11% compared with 9.8%).

The largest expansion in output since 2002 has been in mining, excluding oil and gas. Non-metallic minerals drove the advance. Initially, the increase reflected the continued development of diamond mines in northern Canada. More recently, output of potash has risen in response to high prices.

The turnaround for metals followed a decade of decline, unlike the repeated boom-bust movement of energy prices. Perhaps because of the memories of this protracted decline, investment and output in metals and minerals have been slower to respond to the boom than in energy.

It is often asserted that one of the downfalls of a growing reliance on resource-based industries is their "boom-bust" nature. However, examining the variability of output and export earnings yields an overall impression of stability compared with the rest of the economy.

After peaking in July, imports fell 3.9% to $34.4 billion in August. Despite the considerable appreciation of the Canadian dollar against the American dollar since the beginning of 2007, August's decrease in imports was the result of widespread declines in all sectors except energy products and agricultural and fishing products.

With imports falling at twice the pace of exports, the nation's trade balance with the world expanded to $4.1 billion. At the same time, Canada's trade surplus with the United States widened to $6.7 billion.

The deficit with countries other than the United States narrowed to $2.6 billion, with all principal trading areas contributing to the contraction.

Exports decrease despite strong growth in machinery and equipment

Declines in exports of industrial goods and materials, and to a lesser extent automotive products, overshadowed gains in machinery and equipment and agricultural and fishing products, the only two sectors to record increases in August.

After hitting a record high in July, exports of industrial goods and materials contracted 9.0% to $8.8 billion. Although there was weakness in all areas of the sector, metal ores, particularly nickel, registered the largest decrease. Chemicals, plastics and fertilizers fell 4.3% to $2.8 billion, as exports of inorganic chemicals faltered.

Exports of automotive products declined 6.0% to $6.2 billion, following July's increase. The bulk of the decrease stemmed from passenger autos, which dropped 8.5% to $3.1 billion. Motor vehicle parts decreased 3.5% to $2.1 billion, while trucks and other motor vehicles declined for the fifth month in a row, falling below the $1-billion mark for the first time this year. Exports of automotive products have been on a downward trend since the start of 2007. Demand for motor vehicles in the United States has been weak over the summer months.

Exports of forestry products fell 1.0% to $2.4 billion, the fifth decrease in as many months. Canadian production has been curtailed by labour unrest in British Columbia. Newsprint and other paper and paperboard products also continued their downward trend, falling for the fifth consecutive month. On the other hand, wood pulp and other wood products that are used in the manufacture of paper rose 6.6% in August, as exports to China were especially strong.

Energy products slipped 0.3% to $7.2 billion, the third monthly decline. Increased exports of natural gas and other energy products, particularly coal and other bituminous substances, were offset by decreases in crude petroleum. The decline in crude petroleum was primarily the result of falling volumes, as prices decreased only marginally. In the case of natural gas, volumes rose while prices fell, whereas for coal, volumes rose much faster than prices.

Aircraft, engines and parts climbed 37.1% to $2.1 billion, propelling total exports of the machinery and equipment sector upwards 6.6% to $8.4 billion. Industrial machinery exports were up for the second consecutive month, rising 5.1% to a record high of $1.8 billion.

Following a dip in July, agricultural and fishing products were up 5.4% to $2.9 billion, as canola exports soared 35.2%. Canola production remained high as the burgeoning bio-diesel industry and the demand for high-quality specialty canola oils continued to support growth in this area.

Automotive products drive down imports

Imports decreased for the first time since May. Although the declines were widespread, the automotive products and industrial goods and materials sectors led the decrease. The only sector to record an increase was agricultural and fishing products.

Imports of automotive products tumbled 8.1% to $6.6 billion, partially reversing a gain in July, with motor vehicle parts and passenger autos accounting for the bulk of the decline. Motor vehicle parts plunged 8.2% to $2.9 billion, falling to their second-lowest level in almost 10 years, while passenger autos plummeted 9.7% to $2.3 billion. Trucks and other motor vehicles declined 5.2% to $1.4 billion, their lowest level this year.

Industrial goods and materials fell 6.2% to $6.9 billion. Chemicals and plastics, particularly organic chemicals, registered the largest drop, as imports of active agents used in the manufacture of pharmaceuticals declined. Metals and metal ores also declined in August.

Machinery and equipment fell 2.8% to $9.7 billion. Imports of aircraft and other transportation equipment were largely responsible, declining 12.1% to $1.5 billion and undermining the increases recorded in the previous months. Nevertheless, an increase in imports of industrial water filtration machinery and of office machines, particularly computers in preparation for the return to school, curtailed the declines.

Imports of other consumer goods were down 2.7% to $4.4 billion, curbing last month's increase. Imports of miscellaneous consumer goods, particularly pharmaceuticals from the European Union, were largely responsible for the decrease.

Energy product imports remained virtually unchanged at $3.2 billion as falling imports of petroleum and coal products offset rising crude petroleum imports. Declining volumes and prices led to the fall in petroleum and coal products, while for crude petroleum volumes rose considerably.

Agricultural and fishing products set a new record high in August, rising 2.1% to $2.1 billion. Record imports of beverages as well as meat and meat preparations were responsible for a large portion of the increase. Imports of corn for use in animal feed and of fish and marine animals, primarily live lobsters, were also strong.

Merchandise trade
	July 2007r	August 2007	July to August 2007	August 2006 to August 2007	January to August 2006	January to August 2007	January–August 2006 to January–August 2007
	Seasonally adjusted, $ current
	$ millions		% change		$ millions		% change
Principal trading partners
Exports
United States	29,742	29,163	-1.9	-3.2	242,559	241,032	-0.6
Japan	810	825	1.9	-11.2	6,887	7,026	2.0
European Union1	3,405	3,301	-3.1	22.6	21,038	27,435	30.4
Other OECD countries2	1,742	1,732	-0.6	20.8	10,623	14,065	32.4
All other countries	3,500	3,454	-1.3	16.3	21,335	26,260	23.1
Total	39,199	38,475	-1.8	0.8	302,439	315,818	4.4
Imports
United States	23,260	22,461	-3.4	-0.2	175,179	181,040	3.3
Japan	1,042	1,012	-2.9	-5.5	8,004	7,969	-0.4
European Union1	3,816	3,452	-9.5	-7.7	27,915	28,508	2.1
Other OECD countries2	2,055	1,993	-3.0	1.0	15,706	16,202	3.2
All other countries	5,619	5,490	-2.3	2.4	40,838	44,143	8.1
Total	35,793	34,407	-3.9	-0.7	267,638	277,861	3.8
Balance
United States	6,482	6,702	...	...	67,380	59,992	...
Japan	-232	-187	...	...	-1,117	-943	...
European Union1	-411	-151	...	...	-6,877	-1,073	...
Other OECD countries2	-313	-261	...	...	-5,083	-2,137	...
All other countries	-2,119	-2,036	...	...	-19,503	-17,883	...
Total	3,406	4,068	...	...	34,801	37,957	...
Principal commodity groupings
Exports
Agricultural and fishing products	2,794	2,945	5.4	10.9	20,381	23,090	13.3
Energy products	7,187	7,166	-0.3	-6.0	59,310	60,059	1.3
Forestry products	2,426	2,401	-1.0	-11.7	22,657	20,233	-10.7
Industrial goods and materials	9,613	8,752	-9.0	7.0	60,313	71,525	18.6
Machinery and equipment	7,853	8,375	6.6	6.7	62,554	65,300	4.4
Automotive products	6,555	6,161	-6.0	-4.0	55,432	52,953	-4.5
Other consumer goods	1,568	1,529	-2.5	3.0	11,591	12,884	11.2
Special transactions trade3	676	664	-1.8	-2.5	5,766	5,708	-1.0
Other balance of payments adjustments	528	483	-8.5	-11.4	4,434	4,068	-8.3
Imports
Agricultural and fishing products	2,092	2,136	2.1	6.4	15,369	16,891	9.9
Energy products	3,223	3,225	0.1	-5.2	23,700	24,154	1.9
Forestry products	246	244	-0.8	-6.2	2,036	2,000	-1.8
Industrial goods and materials	7,343	6,888	-6.2	-3.1	55,585	57,090	2.7
Machinery and equipment	10,000	9,716	-2.8	0.7	75,408	78,095	3.6
Automotive products	7,142	6,563	-8.1	-4.4	53,117	53,953	1.6
Other consumer goods	4,571	4,448	-2.7	2.9	34,125	36,600	7.3
Special transactions trade3	482	522	8.3	44.2	2,955	3,675	24.4
Other balance of payments adjustments	695	664	-4.5	-2.2	5,346	5,404	1.1
r revised ... not applicable 1. Includes Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and United Kingdom. 2. Other countries in the Organisation for Economic Cooperation and Development (OECD) include Australia, Canada, Iceland, Mexico, New Zealand, Norway, South Korea, Switzerland and Turkey. 3. These are mainly low-valued transactions, value of repairs to equipment, and goods returned to country of origin.

Note to readers

Merchandise trade is one component of the current account of Canada's balance of payments, which also includes trade in services.

International merchandise trade data by country are available on both a balance of payments and a customs basis for the United States, Japan and the United Kingdom. Trade data for all other individual countries are available on a customs basis only. Balance of payments data are derived from customs data by making adjustments for items such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts.

At the end of each quarter, The Daily includes a section describing trends and topics of interest relating to Canadian international merchandise trade. This section typically discusses data presented on a customs basis and not seasonally adjusted.

Revisions

In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Each quarter, customs basis data are revised for the previous data year.

Factors influencing revisions include late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.

Revised data are available in the appropriate CANSIM tables.