International Merchandise Trade

The Canadian international merchandise trade statistics program measures the change in the stock of material resources in Canada resulting from the movement of merchandise into or out of the country. Information on imports and exports are inputs into the Canadian System of Macroeconomic Accounts—particularly in the balance of international payments and gross domestic product—and are used in the formulation of trade and budgetary policies. Governments, importers, exporters, manufacturers and shipping companies use international merchandise trade statistics to:

• monitor import penetration and export performance
• monitor commodity price and volume changes
• examine transport implications

Merchandise trade statistics are reported and presented on two different bases in the monthly statistics: ‘customs’ basis and ‘balance of payments’ basis.

When goods are imported into or exported from Canada, declarations must be filed with the Canada Border Service Agency, giving such information as description and value of the goods, origin and port of clearance of commodities and mode of transport. Most of this information is required for the purposes of customs administration. Statistics developed from administrative records of customs are commonly referred to as customs-based trade statistics.

Customs-based trade statistics are compiled according to the general trade system, as defined by the United Nations Statistical Office. Under this system, imports include all goods that have crossed Canada's territorial boundary, whether for immediate consumption in Canada or for storage in bonded customs warehouses. Domestic exports include goods grown, extracted or manufactured in Canada, including goods of foreign origin that have been materially transformed in Canada. Re-exports are exports of goods of foreign origin that have not been materially transformed in Canada, including foreign goods withdrawn for export from bonded customs warehouses. Total exports are the sum of domestic exports and re-exports. Thus the general trade system, in principle, presents all goods entering the country (imports) and all goods leaving the country (exports). Conceptually, under this system, the statistical frontier coincides with the geographical boundary.

The transaction value of imported goods includes all transportation and associated costs incurred up to the point of direct shipment to Canada. Therefore, Canada's imports are valued Free on Board (FOB) place of direct shipment to Canada. It excludes freight and insurance costs in bringing the goods to Canada from the point of direct shipment.

For countries other than the United States, exports are recorded at the value declared on export documents, which usually reflect the transaction value (i.e., actual selling price or, in the case of a non-arm's length transaction, the transfer price used for company accounting purposes). Canada's exports to overseas countries are valued FOB port of exit, including domestic freight charges to that point, but net of discounts and allowances. As of January, 1990, Canada's exports to the U.S. are valued FOB point of exit from Canada. Prior to 1990, they were valued FOB place of lading, net of freight charges, discounts and allowances.

The closing of the statistical month for imports and exports is defined as the last calendar day of the month, based on the date of clearance from customs. Documents received too late for incorporation in that statistical month are published the following statistical month, but are still assigned to the month in which the transaction took place.

Exports are attributed to the country that is the last known destination of the goods at the time of export. Exports to the United States are attributed to the state of destination.

On a customs basis, imports are attributed to their country of origin, that is, the country in which the goods were grown, extracted or manufactured, in accordance with the rules of origin administered by the Canada Border Services Agency.

Customs-based information is adjusted to conform to the balance of international payments concepts and definitions. The adjustments to derive balance of payments-based trade data include adjustments related to trade definition, valuation and timing. The principal difference between the two trade concepts is that customs-based merchandise trade statistics cover the physical movement of goods as they are reflected in customs documents, while balance of payments-adjusted data are intended to cover all economic transactions that involve merchandise traded between residents and non-residents, regardless of whether the goods actually cross the border and only when there is a change in ownership.

On a balance of payments basis, the imports are attributed to the country of export instead of the country of origin to reflect the change in ownership of the goods (with no adjustment for exports). Imports from the United States are attributed to the state of origin.