The Quebec Ministry of Finance expects Canadian exports to increase 2.2% in 2021 and 7.6% in 2022.
These increases in Canadian exports are mainly due to the recovery of global economic activity, especially in the United States.
However, the 2021 rally will be mitigated by the appreciation of the Canadian dollar and by disruptions in production lines, particularly in the automotive sector.
Conversely, import growth will be supported by strong domestic demand and a rising exchange rate, reducing the cost in Canadian dollars of goods and services produced abroad.
In context, economic growth was robust in the United States in the first half of 2021, as the economy showed resilience in the face of various Covid-19 outbreaks.
As a result, real GDP exceeded its pre-pandemic level by 1.4% in the third quarter of 2021.
According to the Québec government, American businesses and consumers have adapted to sanitary measures. Additionally, stimulus packages enacted by Congress in late 2020 and early 2021 have supported growth.
Going forward, the strength of the United States economy in the first half of the year is expected to translate into a 6.0% increase in real GDP in that country by 2021, after a 3.4% decrease in 2020.
Despite the upward revision, several factors should lead to slower growth in 2022, including the withdrawal of fiscal support, particularly with the expiration of special unemployment insurance programs, supply chain bottlenecks and the labor shortage.
Furthermore, the pandemic continues to be a major source of risk. Despite the wide availability of vaccines in the United States, some states have low vaccination rates, and the emergence of new variants could temporarily slow economic growth.
In hindsight, Canadian exports fell 9.7% in 2020, while imports to Canada fell 10.8%, according to the Quebec Ministry of Finance.