In this study only merchandise trade will be considered. This is partly due to data constraints, and partly because most services, especially those that can be delivered digitally, are assumed to be minimally affected by transportation disruptions.Footnote1 For both imports (upstream supply) and exports (downstream demand), this paper uses a customs-basis Canadian merchandise trade dataset from Statistics Canada for 2019 at the most detailed level of Harmonized System (HS) available, i.e. 10-digit codes for imports and 8-digit codes for exports. This dataset contains five dimensions that are useful for the study of GVCs: country of origin/destination, province of origin/destination, product, mode of transportation, and port of entry/exit; although, for our purposes we drop the country and province dimension.

Following the outbreak of COVID-19, global supply chains are at the risk of major disruptions. This report provides a cursory analysis of products that have limited international supply for Canada. These products could be especially susceptible and may require extra attention from policy makers to ensure minimum operations and necessities. In 2019, Canada imported nearly 10 thousand unique products at the 10-digit level under the Harmonized System (HS) classification. However, due to Canada’s unique trading relationship with the United States and the integrated supply chains between the two countries, the U.S. consistently showed up as one of, if not the largest supplier for these products. Out of products with multiple suppliers, the U.S. was the top supplier for over 5000 products and had import shares of more than 90% in nearly a quarter of them. The other dominant supplier for Canada was China, which was not only the largest supplier for nearly 2000 products, but also had over 90% import share in 120 of them. Other major suppliers include Germany, Italy, and Mexico, where each country was the top supplier for approximately 200 products.

The COVID-19 pandemic has renewed interest in international supply chains. While international supply chains proved to be very robust in the pandemic period of closed borders, restrictions on movement of people and goods, and closures of businesses, the pandemic proved the need for better tools, particularly for policy makers, to ascertain the health and resilience of international supply chains and the impact they have on their respective economies. This report attempts to provide one such tool with the creation of a set of indices to measure the vulnerability of Canadian industries to disruptions in both upstream and downstream international supply chains.

In order to analyze the vulnerability and risks of a supply chain disruption to Canada, it is important to understand where Canada and Canadian firms fit into GVCs. On the one hand, if Canada’s production mainly happens at the beginning—or upstream—of a GVC, the primary concern would be a negative demand shock to Canadian industries. On the other, if Canadian production happens at the end—or downstream—of a GVC, the primary concern would be a supply shock to key inputs. If Canada’s production is in the middle of a GVC, both supply and demand shocks are concerns. This paper will attempt to answer where Canada fits into the global production process by assessing the upstreamness and downstreamness of Canadian production and trade.

2019: This report provides a comprehensive summary of the main developments in Canada’s commercial activities during the previous year. It describes the events that took place in the global economy and trade in 2018, the main developments in Canada’s economy and those of its most important partner economies and regions. It reports the developments in Canada’s trade in goods and services, as well as flows and stocks of foreign direct investment and Canadian direct investment abroad. 2020: This report gives Canadians a snapshot of our economic activities in 2019 while recognizing the unprecedented global uncertainty of 2020 amid the COVID-19 pandemic. This report highlights how Canadian innovation and resilience has allowed our businesses to continue to compete in the global marketplace and our government’s commitment to supporting trade through turbulent times. 2021: This report captures the story of the incredible sacrifices made and resilience demonstrated by Canadians and businesses through an unparalleled chapter in our country's history, and charts a path forward as we step into our recovery from the COVID-19 pandemic. 2022 : This report highlights Canada's robust trade and investment recovery, which has displayed remarkable resilience during another challenging year. This year's report focuses on free trade agreements, which will continue to be vital tools for Canadian businesses as they enter this new phase of the post-pandemic recovery.

Canada’s Export Diversification Strategy facilitates efforts to help Canadian businesses reduce the uncertainties and potential disruptions they may face in international trade, as well as help them seize the opportunities created by diversifying to new global markets.