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Data concepts and methods
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Concepts: Understanding export and import values, volumes and prices
Throughout this article, export and import values, volumes, and prices are discussed and thus, it is important to make clear the relationship between these three concepts.
Export values are the dollar value of Canada’s merchandise sales abroad. Export values can be broken down into two components: export prices and export volumes.
Export prices are the prices charged for the merchandise sold abroad. Export volumes are export values adjusted for price, also known as real exports or constant dollar exports. While export values offer an indication of whether Canadian companies received more dollars or fewer dollars for their goods, export volumes offer an indication of quantity. For example, metal export values were higher in 2006 than in 2005. But export volumes were roughly the same in 2006 as in 2005. So the reason that metal export values were higher in 2006 was not that ‘more’ metals were exported but rather that Canadian metal exporters received higher prices for their products.
Similarly, import values are the dollar value of Canada’s merchandise purchases from companies located in other countries. Import prices are the prices that Canadian companies pay to import these products and import volumes, or real imports, are import values adjusted for price. Import volumes in 2006 for products such as machinery and equipment grew at a faster pace than import values. This is because import prices fell, primarily the result of the appreciation of the Canadian dollar vis-à-vis the US dollar. When import prices fall, import values may ‘underestimate’ the strength of imports as they indicate the lower value that Canadians paid to purchase these products. However, when the price decline is factored out, as it is in export volumes, the tremendous growth in imports is evident.
Methods: Analyzing international merchandise trade data
Statistics Canada derives import trade data primarily from administrative records compiled by the Canada Border Services Agency. Canadian exports to the United States are compiled using United States import statistics and export to other destinations are compiled by the International Trade Division from forms received via the CBSA and from Summary Reports and Canadian Automated Export Declarations (CAED) submitted directly to Statistics Canada. This data is customs-based data.
Customs-based information undergoes certain adjusted in order to conform to the concepts and definitions of the Canadian System of National Accounts. The adjustments to derive balance of payments based trade data include valuation, residency, timing and coverage.
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 on customs documents, while balance of payments adjusted data are intended to cover all economic transactions between residents and non-residents which involve merchandise trade. While balance of payments-based data, which make up part of the current account, are more useful for those interested in macroeconomic issues, customs data provide a wealth of detail on specific commodities and trading partners.
All data in this paper that reference a trading partner are customs-based with the exception of the United States and the ‘countries other than the United States’ group, which are balance-of-payments based. All trade values by sector are also balance of payments based. All data that reference products at a detailed levels or exports by province are customs-based.
