Price or quantity effect? The impacts of the pandemic on Canadian trade

Largely due to the COVID-19 pandemic, Canada’s merchandise trade —and merchandise trade around the world—has been volatile in the last two years. Business closures to control the spread of the virus, shifts in spending patterns, volatile commodity prices, and lingering supply chain issues have all contributed to the disruptions in trade. Between February 2020 and May 2020, Canadian imports and exports both fell 29%. As pandemic restrictions gradually eased, monetary policy become more accommodating, fiscal supports materialized, and Canadians transitioned to working online, Canadian trade rebounded. As of October 2021, Canadian merchandise imports were 5.7% above 2019 average (pre-pandemic) levels, while Canadian merchandise exports were 13% above pre-pandemic levels. However, the fall and subsequent recovery of Canadian trade is more complicated than the simple narrative that things have returned to normal. In general, two components determine the value of Canadian trade: the quantity of goods traded and the price paid for those goods. Examining the quantity and price changes over the last two years provides more nuance on what actually changed during the pandemic, and contributes to a clearer narrative of the emerging trends in merchandise trade.

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Title (French) Effet volume ou effet prix? L’impact de la pandémie sur le commerce international canadien.
Update Frequency not_planned
Geographic Scope []
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Sensitivity Level unrestricted
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Contact Email REA@international.gc.ca
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Open Canada Date Published 2022-01-20 00:00:00
Open Canada Date Modified
Open Canada Subject ["economics_and_industry", "government_and_politics", "transport"]
Open Canada Keywords {"en": ["COVID-19 pandemic", "merchandise", "trade", "restrictions", "business closures", "chain issues", "emerging trends", "price changes"], "fr": ["la pandémie de COVID-19", "commerce de marchandises", "fermetures d'entreprises", "problèmes de chaines"]}
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