Manufacturing slowdown could signal sluggish growth ahead

Canadian manufacturing sales dropped by one per cent or $572.4 million on a month-over-month basis in January, according to figures released Friday by Statistics Canada.

According to the federal statistics agency, sales fell in 14 of 21 industries. The sectors most responsible for the decline were motor vehicles, aerospace products and parts and primary metal industries.

A note from Capital Economics said that a decline in sales from vehicle assembly plants was the biggest factor.

Though the numbers came in slightly below expectations, Craig Wright, chief economist for Royal Bank of Canada, said they should not be cause for concern as declines generally occur after stronger periods.

The unpredictability of the aerospace sector also may have played a role.

“Aerospace is the most volatile component so to see a drop is not surprising,“ Wright said, adding that he expects to see better overall numbers in general in future reports.

Wright said that U.S. President Donald Trump’s steel tariff announcement didn’t play a significant role in this survey, as these numbers would have preceded that announcement.

Royce Mendes, director and senior economist at CIBC World Markets, said he was not surprised by the report, and that export data previously collected suggested such a decline was coming.

“The survey suggests that GDP data could look soggy to open the New Year,” Mendes wrote in a note.

According to the note from Capital Economics, the StatsCan report is a reflection of troubles in the export sector, which has not benefited from a pick-up in global economic activity or previous declines in the Canadian Dollar.

Those are among the factors that led Capital Economics to forecast slow economic growth this year.

The StatsCan report indicated manufacturing sales decreased in five provinces, with Ontario showing the largest decrease in total dollars. After two consecutive months of increases, Ontario’s January sales were $595 million lower than December’s and $515 million lower compared to last year.

The biggest percentage decrease came out of Northwest Territories and Nunavut, whose figures were reported together. Their sales slipped to $4.3 million from $6.3 million in December, a 32.2 per cent decline. The second biggest decline was felt in PEI, which saw a 13 per cent decline since December, to $136.3 million from $156.7 million.

The biggest monthly increase was in Saskatchewan, which saw sales increase by 5.7 per cent to $1.3 billion. New Brunswick has seen the biggest sales increase of all provinces and territories this past year, resulting in a 15.2 per cent from January 2017.

Overall, on a year-over-year basis, Canada still netted a $1.56 billion increase in manufacturing sales compared to last January, a rise of 2.9 per cent.

Financial Post

Rising interest rates could allow Liberals to post smaller deficits in 2019: PBO

OTTAWA — The Liberal government could enjoy billions of dollars worth of extra breathing room in its pre-election budget next year, as rising interest rates dramatically reduce some of Ottawa’s key personnel expenses, a new report says.

Parliamentary Budget Officer Jean-Denis Frechette will release a study Tuesday that finds government expenses tied to pensions and disability benefits could fall as much as $8 billion per year by 2023 — leaving the Liberals with an opportunity to forecast substantially smaller deficits just ahead of the 2019 election.

The extra fiscal room is the result of an accounting practice that links the perceived future value of pension and disability liabilities to interest rates. As interest rates rise, the future amount owing on those liabilities effectively declines, in turn lowering the amount of money governments need to set aside every year to cover the expense.

The PBO report digs into Ottawa’s roughly $130-billion pool for direct program spending — a long-under monitored and notoriously opaque section of the public purse. Roughly $50 billion of direct program spending goes toward government personnel, either in the form of wages, employment insurance contributions, pension contributions or health and dental coverage.

Over the past 10 years, the report found, expenses tied to pension contributions and disability benefits have ballooned from $2 billion per year to roughly $10 billion. Now, with interest rates expected to rise, those expenses could fall sharply in the next five years, down to around their previous levels. 

The fiscal boost comes just as Finance Minister Bill Morneau faces criticism that Ottawa has not placed enough emphasis on balancing its books, instead driving up its fiscal stimulus measures and piling money into research and development programs.

The Liberals’ 2018-19 budget ran a $18.1-billion deficit, including a $3-billion adjustment for risk. That will fall to $17.5 billion in 2019-20. 

Opposition Members of Parliament, and some economists, have criticized the document for containing no roadmap back to a balanced budget, as prime minister Trudeau had promised during his campaign. 

Most economists and bank analysts expect the Bank of Canada to continue hiking its key interest rate this year, after the Canadian economy outpaced growth expectations early in 2017, growing three per cent over the year. 

The BoC has hiked its overnight interest rates three times since July 2017, up to 1.25 per cent.

However, the bank has struck a decidedly more cautious tone in recent weeks amid concerns that negotiations around the North American Free Trade Agreement could implode, crimping business investment. On March 7 the bank held its overnight rate, citing trade uncertainty.

While rising interest rates also cause the cost of government debt to rise, most of those debts are fixed into decades-long time horizons, and so are less exposed to interest rate fluctuations. 

The budgetary tailwind enjoyed by the Liberal Party is in contrast to the headwinds faced by former prime minister Stephen Harper, who cut roughly $4.9 billion from direct program spending in its 2015-16 budget. Those cuts failed to materialize on the government books, due to plummeting interest rates that in turn raised the cost of pensions and disability benefits.

Ottawa owes roughly $300 billion in pension and disability liabilities, spread out over many years. For future disability benefits alone, Ottawa owes a total of roughly $130 billion, up from $57 billion in 2005-06.

MPs have called for more transparency in direct program spending, arguing that the pool is often used to cover spending miscalculations in other sections of the budget. The PBO report marks its first such study of those program expenses. 

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Brace yourself for the busiest week in recent memory for the world economy

For those tracking the world economy, this week is shaping up to be one of the busiest in recent memory.

From the selection of a new governor at the People’s Bank of China to the Federal Reserve’s likely first interest rate increase of 2018, here is a rundown of the key events and what they mean.

Monday: China gets a new central banker

Five months after PBOC Governor Zhou Xiaochuan hinted he would soon step down after 15 years, the National People’s Congress will name his successor. Tasked with guiding the world’s second largest economy as its authorities try to curb its debt, Zhou’s replacement will take the reins of a central bank that’s wielding ever greater power at home and abroad. Just this week, the government handed it the power to rewrite the rules for the financial sector it’s seeking to restrain.

Tuesday: G-20 finance chiefs present outlook

Central bankers and finance ministers from the Group of 20 are gathering for the first time this year in Buenos Aires. Their talks start Monday and conclude with the release of a

statement on Tuesday. They convene at a time when the global economy is in rude health, yet concerns are growing that its upswing may boil over. While officials say they want to discuss what to do about cryptocurrencies, the topic of the moment is President Donald Trump’s plan to impose tariffs on steel and aluminum. Many governments are lobbying to be exempted, while also warning of a potential trade war. That could make for an uncomfortable couple of days for U.S. Treasury Secretary Steven Mnuchin as he tries to play down trade frictions. Scandal-plagued Japanese Finance Minister Taro Aso will not be attending.

Wednesday: Will the Fed raise interest rates?

Jerome Powell

Jerome Powell makes his debut in the hot seat, chairing his first meeting of the Federal Open Market Committee after taking over from Janet Yellen. With the economy growing and the labor market tightening, betting is the Fed will raise its benchmark overnight lending rate to a range of 1.5 percent to 1.75 percent. Perhaps a bigger question is whether officials will boost their estimate for 2018 rate hikes to four from a median of three at their last forecast round in December. Elsewhere in the Americas, Brazil’s central bank is predicted to cut its key rate to a record low.

Thursday: Bank of England readies rate increase

Bank of England Governor Mark Carney

Bank of England officials are expected to lay the groundwork for an interest-rate increase in May. Inflation in the U.K. is still 1 percentage point above the bank’s target and policy makers are concerned that the economy’s speed-limit has dropped since the Brexit vote, leaving it at risk of overheating. Investors currently assign a more than 80 per cent chance of a move in May, and it would take a big shock from the BOE on Thursday to prompt a significant unwinding of that trade. Elsewhere in the world, New Zealand, the Philippines and Indonesia also set rates today. Germany releases its Ifo Index on the business climate, which is expected to slip.

Friday: Trump imposes steel tariffs

Donald Trump

Trump this month announced 25 per cent tariffs on imported steel and 10 per cent for aluminum and they take effect Friday. Canada and Mexico are already excluded from the levies, and the Trump administration has left the door open for Australia and possibly other allies to win a similar concession if they can show they are trading fairly and are national-security partners. Planned retaliation from the European Union to China has triggered concerns over a global trade war.

SearchInk rebrands as omni:us, aims its hand-writing reading AI at insurance industry

Back in 2016 a startup called SearchInk, launched out of Berlin with the aim of combining machine learning with handwriting recognition. The upshot would be the ability to semantically label handwritten documents. Pretty nifty. It went on to raise €4.2 million in seed funding, but after developing this AI to read hard-written documents, it went in search of a market and business model. Not an easy thing to do. After all, what industry needs hand-written documents read at scale, when so many documents today are born digital in the first place? It turns out there was one after-all: the insurance industry.

In that sector, claims forms, emails and invoices are currently processed manually. But CEO and co-founder Sofie Quidenus-Wahlforss realised that her company’s technology could significantly reduce the time and cost spent on administrative tasks, as well as the risk of human error.

So today, SearchInk rebrands as omni:us, a next generation AI service with two main products aimed squarely at the insurance industry: omni:us Claim and omni:us Policy. The idea is to be able to process digital documents, some of which contain handwriting, by classifying them and extracting the valuable data.

Omni:us is launching these products first in the DACH region, and claims to be working with over half of the top 10 insurance providers. It also says it can deploy its claims management and policy extraction products into an organisation within a matter of weeks. It’s now raise a total of $6.5 million from individual angels and VC, including Anthemis.

Quidenus-Wahlforss said: “Industry predictions show that insurance data will grow by 94% in 2018, 84% of which will be in highly variable documentation. However, in the future, there is also huge potential to apply omni:us technology to many other diverse industries such as finance, manufacturing, transportation and healthcare.”

She added that “We see customers improving their claims turn around time by 80% and all of that at 75% of the original costs. Why is this the case? Fundamentally, because with omni:us manual interventions can be reduced to a minimum, due to the supervised machine learning approach. One of our clients could speed up the comparison by an average 90% at only 80% of the costs.”

Furthermore, the AI could analyze policies with an annual value of only 250 Euro, which normally be a waste of a human being’s time and effort.

Omni:us is now in the process of raising a further funding round this year, opening an office in the US and growing its team.

EdTech is having a renaissance, powered by the emerging world

So-called ‘EdTech’ has seen many false dawns over the years. After being lauded as the teaching platforms of the future, most MOOCs (Massive Open Online Course platforms) have not quite lived up to the superlatives made for them, and the sector has had trouble coming up with more innovative ideas for a while.

But that appears to be changing if a new wave of startups is any indication. In Dubai this weekend I was invited to judge a number of education startups which are really trying to move the need on EdTech, and in particular on a sector with almost unlimited potential. That is, education platforms aimed at the emerging world, where the hunger for scalable education is almost incalculable.

Consider this: Ethopia, now a far more stable country that it once was, contains more people under 25 than almost anywhere else, and it has a population of over 100 million people. And consider the potential for EdTech to transform countries like India, for instance. This is going to be a very interesting market in the future, as well as being an urgent issue. According to UNESCO, 264 million children do not have access to schooling, while at least 600 million more are “in school but not learning”. These are children who are not achieving even basic skills in maths and reading, which the World Bank calls a “learning crisis”.

A taste of what is to be found in this sector was showcased today at the “Next Billion Edtech Prize,” launched at the Global Education & Skills Forum (think: Davos/WEF for Education) by the Varkey Foundation to recognize the most innovative technology startups destined to have a radical impact on education in low income and emerging world countries.

The overall winner in the competition was Chatterbox, an online language school powered by refugees

This web platform harnesses the wasted talent of unemployed professionals who are refugees, offering them work as online and in-person language tutors. Based in the UK, where there is a language skills shortage estimated to cost the economy £48bn every year, Chatterbox has now signed up several UK universities and major non-profits and corporations to use its services. Having raised a seed round from impact-fund Bethnal Green Ventures, it’s now looking for further funding to expand.

Co-founder and CEO Mursal Hedayat was three years old when she arrived in the UK as a refugee from Afghanistan with her mother, a civil engineer who spoke English and three other languages fluently. “I watched her become unemployed in the UK for more than a decade. Refugees with degrees and valuable skills still face shockingly high levels of underemployment. An idea like Chatterbox has never been more urgently needed,” she says. (Indeed, the conference later heard from Al Gore who quoted research that showed millions of people will become refugees due to climate change in the next few decades).

Chatterbox’s fellow finalists for the $25,000 prize on offer were equally interesting.

Dot Learn was almost literally the same as ‘Silicon Valley’s PiedPiper. It makes online video e-learning far more accessible on slow connections for users in low-income countries, especially because it compresses educational video so making it cheaper to access. Its technology reduces the file-size of learning videos, requiring 1/100th of the bandwidth to watch. At current data prices in Kenya and Nigeria, this means a student or learner can access 5 hrs of online learning for about the cost of sending a single text message ($0.014). The startup was a notable finalist during TechCrunch’s Battlefield Africa.

TeachMeNow is a gig-economy platform for teachers. This marketplace connects teachers, experts, and mentors to students. The technology combines scheduling, payments and live virtual sessions that can connect on any device allows tens of thousands of teachers to create their own online businesses, with some earning over $100,000 last year. In addition, schools and companies including Microsoft use TeachMeNow software to create their own-branded online learning communities.

Sunny Varkey, Founder of the Varkey Foundation and the Next Billion Prize says he launched the prize because “over a billion young people – a number growing every day – are being denied what should be the birthright of every single child. The prize will highlight technology’s potential to tackle the problems that have proven too difficult for successive generations of politicians to solve.”

Other notable finalists included Learning Machine. This using the blockchain as a secure anchor of trust makes verifying the authenticity of a document instantaneously, specifically education documents like university degrees. They are now working to put all the educational records of Malta online.

Localized is a new platform for college students and aspiring professionals in emerging economies to find career guidance, role models and expertise from global professionals who share language and roots (think Slack meets Quora for college students in emerging markets, drawing on diaspora expertise).

The Biz Nation is an EdTech startup focused on empowering youth with technology skills, soft skills, entrepreneurship and financial intelligence through a methodology that improves user’s learning about creating a business.

Late-blooming startups can still thrive

It seems like startup news is full of overnight success stories and sudden failures, like the scooter rental company that went from zero to a $300 million valuation in months or the blood-testing unicorn that went from billions to nearly naught.

But what about those other companies that mature more gradually? Is there such a thing as slow and successful in startup-land?

To contemplate that question, Crunchbase News set out to assemble a data set of top late-blooming startups. We looked at companies that were founded in or before 2010 that raised large amounts of capital after 2015, and we also looked at companies founded a least five years ago that raised large early-stage funds in the last year. (For more details on the rules we used to select the companies, check “Data Methods” at the end of the post.)

The exercise was a counterpoint to a data set we did a couple of weeks ago, looking at characteristics of the fastest growing startups by capital raised. For that list, we found plenty of similarities between members, including a preponderance of companies in a few hot sectors, many famous founders and a lot of cancer drug developers.

For the late bloomers, however, patterns were harder to pinpoint. The breakdown wasn’t too different from venture-backed companies overall. Slower-growing companies could come from major venture hubs as well as cities with smaller startup ecosystems. They could be in biotech, medical devices, mobile gaming or even meditation.

What we did find, however, was an interesting and inspiring collection of stories for those of us who’ve been toiling away at something for a long time, with hopes still of striking it big.

Pivots and patience

Even youthful startups have been known to make a major pivot or two. So it’s not surprising to see a lot of pivots among late bloomers that have had more time to tinker with their business models.

One that fits this mold is Headspace, provider of a popular meditation app. The company, founded in 2010 by a British-born Buddhist monk with a degree in circus arts, started as a meditation-focused events startup. But it turned out people wanted to build on their learning on their own time, so Headspace put together some online lessons. Today, Santa Monica-based Headspace has millions of users and has raised $75 million in venture funding.

For late bloomers, the pivot can mean going from a model with limited scalability to one that can attract a much wider audience. That’s the case with Headspace, which would have been limited in its events business to those who could physically show up. Its online model, with instant, global reach, turns the business into something venture investors can line up behind.

Sometimes your sector becomes hip

They say if you wait long enough, everything comes back in style. That mantra usually works as an excuse for hoarding ’80s clothes in the attic. But it also can apply to entrepreneurial companies, which may have launched years before their industry evolved into something venture investors were competing to back.

Take Vacasa, the vacation rental management provider. The company has been around since 2009, but it began raising VC just a couple of years ago amid a broad expansion of its staff and property portfolio. The Portland-based company has raised more than $140 million to date, all of it after 2016, and most in a $103 million October round led by technology growth investor Riverwood Capital.

CloudCraze, which was acquired by Salesforce earlier this week, also took a long time to take venture funding. The Chicago-based provider of business-to-business e-commerce software launched in 2009, but closed its first VC round in 2015, according to Crunchbase records. Prior to the acquisition, the company raised about $30 million, with most of that coming in just a year ago.

Meanwhile, some late bloomers have always been fashionable, just not necessarily as VC-funded companies. Untuckit, a clothing retailer that specializes in button-down shirts that look good untucked, had been building up its business since 2011, but closed its first venture round, a Series A led by VC firm Kleiner Perkins, last June.

Slow-growing venture-backed startups are still not that common

So yes, there is still capital available for those who wait. However, the truth of the matter is most companies that raise substantial sums of venture capital secure their initial seed rounds within a couple years of founding. Companies that chug along for five-plus years without a round and then scale up are comparatively rare.

That said, our data set, which looks at venture and seed funding, does not come close to capturing the full ecosystem of slow-growing startups. For one, many successful bootstrapped companies could raise venture funding but choose not to. And those who do eventually decide to take investment may look at other sources, like private equity, bank financing or even an IPO.

Additionally, the landscape is full of slow-growing startups that do make it, just not in a venture home run exit kind of way. Many stay local, thriving in the places they know best.

On the flip side, companies that wait a long time to take VC funding have also produced some really big exits.

Take Atlassian, the provider of workplace collaboration tools. Founded in 2002, the Australian company waited eight years to take its first VC financing, despite plentiful offers. It went public two years ago, and currently has a market valuation of nearly $14 billion.

The moral: Those who take it slow can still finish ahead.

Data methods

We primarily looked at companies founded in 2010 or earlier in the U.S. and Canada that raised a seed, Series A or Series B round sometime after the beginning of last year, and included some that first raised rounds in 2015 or later and went on to substantial fundraises. We also looked at companies founded in 2012 or earlier that raised a seed or Series A round after the beginning of last year and have raised $30 million or more to date. The list was culled further from there.

Don’t point the finger at Poloz for our languishing loonie

Currency traders may never let Bank of Canada Governor Stephen Poloz escape his past.

Poloz was a rising star at the central bank in the early 1990s when he quit to join a private research firm. In 1999, he joined Export Development Canada as chief economist, and in 2010 he was named president and chief executive officer. He would have interacted with hundreds of exporters during those years. So as far as some on Bay Street are concerned, he’s essentially one of them; installed in Ottawa to do their bidding, a Manchurian Candidate in control of monetary policy.

And what does Big Export want? A weaker dollar, of course.

“Poloz, who’s very much a trade advocate, will orchestrate a lower Canadian dollar to help Canada’s exports sector,” Peter Kotsopoulos, chief executive officer and director of fixed income at Toronto-based MFS Investment Management Canada Ltd. told Bloomberg News this week.

Bloomberg caught Kotsopoulos at a good time. Poloz had given a speech the day before in which he expanded on why he thinks there is slack in the labour market, even though the unemployment rate is at its lowest level in at least four decades. The currency plunged about a cent after the remarks, dropping to US77¢, as traders took the comments to mean the Bank of Canada was in no hurry to raise interest rates.

That was already Kotsopoulos’s assumption. The Canadian currency was having a lacklustre 2018, but up until this week, the majority of forecasters saw it gaining strength over the remainder of the year. “I don’t agree with the consensus forecast,” Kotsopoulos said. His contrarian opinion looks smart. The currency kept falling and was trading at about US76¢ when Bay Street started shutting down for the weekend.

When I got my start in this business two decades ago, at Bloomberg, I was conditioned to revere men and women who manage money. They have something at stake, so they will have taken the time to understand the world better than anyone else. That’s why Kotsopoulos was featured on the Bloomberg terminal. He manages a $500-million bond fund that returned 15 per cent over three years, better than his peers. Therefore, he must know something that the rest of us don’t.

And he might. But the idea that Poloz is trying to “orchestrate” a weaker currency shows that even the most successful Masters of the Universe are suckers for urban legends. The Bank of Canada isn’t “looking” for reasons to leave borrowing costs low, as Avery Shenfeld, chief economist at CIBC World Markets, said this week. Rather, it’s simply waiting for the coast to clear.

The Canadian dollar’s initial tumble this week was strange. Poloz said nothing in his speech at Queen’s University on March 13 that the central bank hadn’t communicated in its latest policy announcement on March 7 and in its “economic progress report,” delivered by Deputy Governor Timothy Lane in Vancouver on March 8.

The drop suggests traders still put extra emphasis on the boss’s words, despite everything Poloz has done in recent years to emphasize that policy is a group decision.

Ranko Berich, head analyst at Monex Canada, a seller of foreign-exchange contracts, said in an interview that the explicitness of Poloz’s comments about the possibility of creating jobs for hundreds of thousands of marginalized workers left an impression on traders.

Of course, many of them read those remarks under the assumption that Poloz will use any excuse to put downward pressure on the exchange rate. Kotsopoulos’s view, “is a fair characterization of a lot of people’s opinions,” Berich said. “Poloz is canny about how he says things. He’s aware of the market implications of those kinds of comments.”

It’s true that Poloz talks more freely about the currency than did his predecessors. But he’s not trying to manipulate its value, at least as far as I can tell after observing him fairly closely for nearly five years. Poloz is simply more honest about the fundamental role the exchange rate plays in monetary policy.

The Bank of Canada’s job is to control inflation, which is determined by aggregate demand and expectations of future prices. Policymakers influence the latter by hitting their inflation target. Aggregate demand is shaped by two things: longer-term interest rates and the exchange rate. So yeah, Poloz cares about the dollar, just as his immediate predecessors did. The difference is that they tended to pretend they didn’t.

All this matters. Those who see Poloz as a currency manipulator may be missing signs that the Bank of Canada is closer to raising interest rates again than many seem to think. (Berich said the probability of an interest-rate increase by May dropped to about 50 per cent this week from 70 per cent a month ago.)

Yes, the rate of economic growth was slower in the fourth quarter than the Bank of Canada predicted, but Poloz said this week that revisions show the actual level of output was in line with expectations. The central bank also noted in its policy statement that credit growth is slowing, a positive because it suggests households are taking control of their borrowing. That would remove a barrier to raising interest rates, as one of the reasons policymakers gave for keeping them low was to help highly leveraged borrowers manage their debts.

Poloz and his deputies are taking an opportunistic approach to raising interest rates. They lifted their benchmark in January, but emphasized they were concerned that uncertainty around the future of the North American Free Trade Agreement was hurting foreign direct investment. They opted against an interest-rate increase earlier this month because uncertainty about trade had worsened.

What might happen if those headwinds ease? Rates will rise. If the dollar’s value was based on that outlook at the start of the week, then the drop was overdone. Nothing changed.

Is Trump right about a U.S. trade deficit with Canada? It depends who you ask

The debate whether the U.S. runs a trade deficit with Canada has surfaced once again.

President Donald Trump tweeted on Thursday that America does indeed have a deficit with its northern neighbour. Trump’s tweet followed a Washington Post report that he acknowledged at a fundraiser he didn’t know whether the assertion was true when he made the claim to Canadian Prime Minister Justin Trudeau.

It’s an important point because Trump has repeatedly threatened to get tough on countries that run a surplus with the U.S.

“We do have a Trade Deficit with Canada, as we do with almost all countries (some of them massive),” Trump wrote. “P.M. Justin Trudeau of Canada, a very good guy, doesn’t like saying that Canada has a Surplus vs. the U.S.(negotiating), but they do…they almost all do…and that’s how I know!”

Even if he was just going on a hunch, is he right?

It depends on what data are used. Canadian officials such as Foreign Affairs Minister Chrystia Freeland, who disputes the claim the U.S. is running a deficit with Canada, tend to use U.S. figures to make their case. America’s Bureau of Economic Analysis has calculated the U.S. has run surpluses — including goods and services — with Canada in the past three years. Ironically, Statistics Canada data show Canada has run surpluses with the U.S. for 36 years straight.

The Canadian statistics agency released a lengthy report on the discrepancy last month, explaining that a big portion of the differences have to do with how countries account for re-exports.

Of course, since it’s the Trump administration crying foul, Canadian officials say it’s only fair to use the U.S. government’s own assessment of trade imbalances.

No matter which methodology is used, the trade balance has been in Canada’s favour for a very long time until it began to even out recently. Canada has run a cumulative surplus totaling $1.1 trillion (US$843 billion) since 1999, according to Canadian figures, thanks in large part to oil shipments. The U.S. data measures the U.S. trade deficit at US$548 billion over that time.