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Tuesday, March 28, 2006

International trade in culture services


Canada's exports in culture services fell for the first time in seven years in 2003, as foreign demand weakened for our services in film and video, and advertising.

At the same time, imports of culture services declined at a slightly slower pace. The resulting trade deficit surged from $476.9 million to $545.4 million, the largest since Statistics Canada first compiled culture services data in 1996.

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Canadian companies exported just over $2.1 billion in services in 2003, down 7% from the peak of more than $2.3 billion the year before. Imports fell 3.4% to just over $2.7 billion.

Note to readers

These estimates deal with culture services, which include intangible products such as film production and post-production services, broadcasts, live artistic performances, culture events such as museum exhibits, publishing and sound recording services, as well as copyright payments or receipts and trademark royalties, and selected advertising, information and architecture services.

Culture goods, which are tangible products, such as books, compact discs, films and paintings are not included in these estimates, although royalty payments associated with the final sale of certain shipments of culture products are included in the goods valuation.

Culture services estimates are based on the Canadian Framework for Culture Statistics. The framework sets out the scope for culture services to include final demand services (such as writing and designing); intellectual property rights for culture products (such as copyright); and content services (intermediate input services that add to or alter the content of a final demand culture good or service.) Examples of content services include graphic design for a book cover and sound engineering for a film. Unlike goods, services are not separate entities over which ownership rights can be established. They cannot be traded separately from their production.

The data are obtained from the Balance of Payments Division of Statistics Canada. Categories of culture services taken from the Canadian Framework for Culture Statistics are not necessarily compatible with Balance of Payments categories of commercial services. The estimates are in current dollars.

The project is funded by the Department of Canadian Heritage.

Weakened demand for Canadian film and video services accounted for the largest part of the decline in total exports.

Exports: Majority of earnings in film and video

A number of factors dampened the demand for Canadian culture services in 2003. These included the impact of a weakened US dollar against the Canadian currency, and domestic shocks such as SARS, floods, fires and a power blackout in Ontario. The primary impact of domestic events was on the provision of services to foreign creators, such as Canadian sound recording studios, location shooting or film and video post-production services. In addition, although to a lesser extent, Canada faced increased competition from emerging new markets in China and India.

The decline in the export of culture services followed a period of growth, at an annual average rate of 13.2% in the six years prior to 2003.

Foreign demand for services fell in three key areas: film and video, advertising, and writing and published works.

The value of film and video services declined 11.0% to just over $1.3 billion, while exports of advertising services were down 30.0% to $129.9 million. Exports of written and published works fell from $31.7 million to $22.2 million.

Film and video services accounted for 61.3% of all receipts in 2003, followed by advertising services at a distant 6.0%. Foreign demand for Canadian exports in the film and video category was primarily for production, distribution and post-production services in the motion picture and video industries.

Gains in exports of architecture and design services partly offset these declines.

Uneven import growth

Growth in the imports of culture services has fluctuated since 1996, peaking in 2000 and again in 2002.

Most of the decline in imports in 2003 was attributable to two categories: architecture and broadcasting services. Imports of architectural services fell 67.5% to $44.4 million, while demand for imported broadcasting services, such as radio and television programs, fell 14.8% to $570.8 million.

On the other hand, imports of services in writing and published works, such as editing, layout or illustrations, rose 30.0% to $45.6 million, leading all culture services categories in terms of growth.

Film and video services accounted for half of all imports, increasing by 9.0% to $1.3 billion in 2003. Imports of broadcasting services were the second largest category, representing 21.0% of total imports or $570.8 million. Services for the performing arts were the third largest category.

United States is a key player in culture services trade

The United States continues to be Canada's largest trading partner in culture services, though the United Kingdom and Ireland have made significant gains in recent years.

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Imported culture services from the United States accounted for 86.1% of total imports in 2003, while exports south of the border represented 71.5% of total exports.

Canadian companies exported more than $1.5 billion in culture services to the United States, although this was a 4.6% decline from 2002. Film and video services accounted for half of all exports despite falling demand over the last four years.

Canada imported $2.3 billion in culture services from the United States in 2003, down 1.5% from the previous year. Film and video services represented almost half of total imports in culture services from south of the border.

Definitions, data sources and methods: survey number 5045.

Detailed and summary data tables for culture services trade, by type of service and culture framework category, along with cross-tabulations for trade between Canada and selected countries and trade blocs in table format (87-213-XWE, free) are now available online. Researchers can also request custom tabulations on a cost-recovery basis.

For more information, or for enquiries on the concepts, methods and data quality of this release, contact Client Services, Culture Statistics Program (1-800-307-3382 or 613-951-7608; fax: 613-951-9040;, Culture, Tourism and the Centre for Education Statistics.

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Date Modified: 2006-03-28 Important Notices