Conclusions and implications for Canada

As globalization increases, so too does the need to better understand how to measure it. Some global production arrangements are well understood, such as goods sent abroad for processing and merchanting, while others, such as factoryless goods production, still remains somewhat challenging^Note 1. This paper examined the prevalence of these production arrangements in the Canadian economy using responses to a subset of questions on the SIBS survey.

With regards to goods sent abroad for processing, this preliminary analysis revealed that this production arrangement may be fairly common. Companies that have the potential to engage in this activity represented between 4% and 6% of all companies in both 2009 and 2012.

With regards to the extreme case of factoryless goods production as well as merchanting, this analysis suggests that these forms of production arrangements remain rather small in Canada, but appear to be increasing over time. For FGPs, it is important that issues surrounding their proper classification and treatment be resolved and proper guidance be given. This is especially true given the indications that this global production arrangement is on the rise in Canada.

Lastly, It is important to note that the SIBS questionnaires was not designed to specifically identify these types of activities and therefore the results provide only a broad indication of their occurrence in Canada. Further, more targeted efforts (specifically designed questions) will be required in the future to get a more accurate picture of these production arrangements.

Notes