Supporting the economy
Using traditional measures of Gross Domestic Product (GDP), a monetary measure for the total value of goods and services across a time period within a country or region, the transportation and warehousing sector made up 3.9% of GDP ($81.4 billion) in 2022. In the past year, the sector rebounded and grew by 9.9% from 2021, after declining more severely than most other industries in 2020 (-5.2%).
Labour shortages
The sector’s labour market continued its recovery from COVID-19; the unemployment rate dropped to 2.8% in 2022, compared to 4.5% in 2021, with a 10-year average of 4.2%. Although the sector’s unemployment rate compares favorably with the national average of 5.3%, that was not reflected in wage growth. Average weekly earnings in transportation and warehousing grew by 1.0% in 2022, while they increased by 4.7% on average for all industries.
According to Employment and Social Development Canada, major gaps between labour demand and supply for some transportation occupations will develop in the next 10 years, for example the trucking sector, which is already experiencing a shortage of over 20,000 drivers. Trends also show that truck drivers tend to be older than the national average.
Women are significantly underrepresented in the transportation industry, while men make up more than 75% of the workforce. Immigrants, especially recent immigrants, and Indigenous people were also underrepresented in most jobs that are experiencing labour shortages including trucking, transit and air transportation.
Competitiveness
The Logistics Performance Index is an interactive benchmarking tool created by The World Bank to help countries identify the challenges and opportunities they face in their performance regarding trade logistics steps they can take to improve performance
Overall, Canada ranked 7th in 2022 with a score of 4.0, very close to the best performers score of 4.3, Singapore. Canada gained 10 spots compared to the last report in 2018. Additionally, Canada ranked particularly high in the “Infrastructure” category, placing 3rd behind Singapore and Switzerland.
Productivity
Recently, multifactor productivity (a way of measuring the economy’s performance by comparing the amount of goods and services produced (output) to the amount of material used to produce those goods and services) in the transportation and warehousing sector has plateaued. Between 2012 and 2021, multifactor productivity decreased around 3.2% per year, compared to the 0.1% increase for the business sector as a whole.
In contrast, labour productivity in transportation and warehousing decreased over the same period, at an annual rate of 0.7%. That’s lower compared to the overall business sector which increased by 1.2%. Labour productivity for rail transportation outperformed the business sector with average annual growth rate of 3.44% while air transportation declined by 5% over the same period.
Supporting trade
Transportation is important for trade. It allows natural resources, agricultural products and manufactured goods to reach domestic and international markets.
In 2021, the value of interprovincial merchandise trade totaled $195 billion, up 20.2% from 2020 after a significant drop due to COVID-19.
In 2022, international merchandise trade equaled around $1.52 trillion, a 21.7% increase from 2021 and 42.5% higher than 2020 when trade was severely affected by the pandemic. The U.S. remains Canada’s top trading partner, with $963 billion in total trade ($600 billion exported, $363 billion imported), up 24.1% from 2021. The U.S. made up 63.4% of all Canadian trade in 2022.
Excluding the U.S., Canada’s top 4 trading partners included China, Mexico, Japan and Germany. These 4 countries represented 16.0% of Canada’s total international trade in 2022.
Canada has 15 free trade agreements in force with 51 countries, representing two-thirds of the global economy. Canada is also the only G7 country to have free trade agreements with every other member of the G7. These agreements connect Canadian businesses to over 1.5 billion consumers around the world.