Supporting the economy
In 2023, the transportation and warehousing sector continued to demonstrate resilience and adaptability in the face of economic challenges. Following a decline in 2021, which mirrored broader economic contractions due to external factors, the sector rebounded impressively in 2022, and further expanded in 2023 by 4.1%.
Specifically, it directly contributed 4.0% to GDP, amounting to $88.5 billion in monetary terms. This underscores the sector's substantial economic footprint and its importance in driving overall economic activity.
Labour
In 2023, the sector’s unemployment rate remained at 2.8%, the same as in 2022. Although lower than national average of 5.3%, it did not result in comparative wage growth. Average weekly earnings in transportation and warehousing grew by 2.2% in 2023, while they increased by 4.7% on average for all industries.
In general, women are significantly underrepresented in the transportation industry, making up less than 25% of the workforce. Initiatives such as the Marine Training Program prepare underrepresented groups including women, northerners, and Indigenous Peoples to enter rewarding careers in the transportation industry. In 2023, the program provided nearly $30 million to 4 training programs.
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. Notably, the trucking sector is already experiencing a shortage of over 20,000 drivers with an aging workforce that is older than the national average.
Competitiveness
The Logistics Performance Index (LPI), developed by The World Bank, serves as a vital tool for benchmarking trade logistics performance globally. In the most recent assessment for 2023, Canada attained the 7th position with a score of 4.0. This marks a significant jump of 10 positions compared to the 2018 report, reflecting Canada's ongoing efforts to enhance its trade logistics efficiency.
Notably, Canada excelled in the “Infrastructure” category, securing the 3rd position globally. This achievement underscores the nation's commitment to maintaining robust infrastructure vital for facilitating smooth trade operations.
Canada's progress in the Logistics Performance Index shows our dedication to improving trade logistics abilities. Moving forward, it’s imperative the department continue fostering an environment conducive to improving trade logistics efficiency. This may involve targeted investments and strategic initiatives aimed at addressing identified challenges and further strengthening Canada's position in the global trade landscape.
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 2013 and 2022, multifactor productivity decreased around 3.4% per year, compared to the 0.2% 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 1.3%. That’s lower compared to the overall business sector, which increased by 1%. Labour productivity for rail transportation outperformed the business sector with average annual growth rate of 2.4% while air transportation declined by 0.6% over the same period.
Supporting trade
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.
In 2023, international merchandise trade equaled around $1.54 trillion, a slight 1.3% increase from 2022 and 43.9% higher than 2020 when trade was severely affected by the pandemic. The United States remains Canada’s top trading partner, with $1.08 trillion in total trade ($593 billion exported, $484 billion imported), up 4.8% from 2022. The U.S. made up 70.1% of all Canadian trade in 2023.
Excluding the U.S., Canada’s top 4 trading partners included China, Japan, Mexico, and the UK. These 4 countries represented 16.0% of Canada’s total international trade in 2022.
In 2022, the domestic trade value of interprovincial merchandise totaled $241 billion, up 19.3% from 2020 after a significant drop due to COVID-19.