Canada Poised to Benefit From European and United States Supply Chain Overhauls

OTTAWA, May 09, 2023 (GLOBE NEWSWIRE) -- As the United States and Europe look to shore up supply chain vulnerabilities stemming from the challenges realized during the pandemic, Canada is well positioned to benefit from these moves, according to new research from The Conference Board of Canada.

"Canadian trade has largely been determined by the forces of globalization and has been critical to meeting the broad demands of households and businesses," said Pedro Antunes, Chief Economist, The Conference Board of Canada. "In addition to the pandemic, growing geopolitical tensions will push businesses and governments towards a more insular economy. Canada needs to be proactive in investing in areas where it has a competitive advantage to make use of these opportunities."

Across much of the world, the policy response to COVID-19 was to shut down significant segments of the economy to help stop the spread of the virus. The timing, extent, and depth of these shutdowns were broadly aligned, leading to a massive hit to the world's economy in the spring of 2020.

Global trade has become more complex and interconnected, however there have also been discussions as to whether it has peaked, which were occurring before the pandemic. For developed nations, globalization has increased households' real incomes by reducing inflation, especially on consumer goods. It has increased competition, expanded the variety of goods and services, and lowered prices on many of those products and services. Not surprisingly, reversing globalization would have the opposite effect on households.

"Research we conducted in August 2022 in tandem with U.S. and European offices of The Conference Board Inc. found that a large share of U.S. and European businesses planned to make changes to the sourcing locations of their raw materials, products, and services," continued Antunes. "The findings were different in Canada where over 90 per cent of the businesses surveyed reported that they were planning to continue sourcing from the same regions in the next three to five years."

Canada is a trusted trade partner, with a strong brand across export categories and has important bilateral and multilateral trade agreements. It is also a global exporter of energy, agrifood, and many other resources. As a country, Canada is well positioned to benefit from a move by U.S. and European firms to secure supply chains.

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