International Trade in Services

International transactions in services are a major component of the current account of the balance of international payments. Services are grouped under four major categories: travel, transportation, commercial services and government services. Such services, together with goods, compensation of employees, investment income and current transfers make up the current account of the balance of international payments.

International trade in services covers a wide and complex variety of transactions on products that are generally intangible in nature. Unlike goods, services are not separate entities over which ownership rights can be established. They cannot be traded separately from their production. Services are heterogeneous outputs produced to order and typically consist of changes in the conditions of the consuming units realized by the activities of producers at the demand of the consumers. By the time their production is completed they must have been provided to the consumers.

Since, by nature, most services are not traded separately from their production, these transactions usually require the simultaneous presence of the producer and the consumer of the services. This simultaneity is not easily realized between countries where distance and political boundaries separate the supplier and client.

Canadian statistics on cross-border services are produced for over 40 categories, based on international standards. To a significant extent, this breakdown is based on the United Nations’ Central Product Classification, whose main objective "is to provide a framework for the international comparison of statistics dealing with products and to serve as a guide for developing or revising existing classification schemes for products in order to make them compatible with international standards.“

Services are largely traded by Canadian business corporations. A small portion are also traded by Canadian governments, government enterprises and households.

Statistics Canada produces both annual and quarterly estimates of international trade in services by type of service and by partner country. Quarterly estimates of Canada's international trade in services are available through the balance of international payments. The quarterly estimates, however, contain less detail in terms of type of service rendered and partner country. Annual estimates are available approximately ten months after the reference year and are more comprehensive in geography and type of service data than the quarterly estimates.