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Economic Cooperation


Economic Cooperation

In 2019, the Canadian economy grew by 1.6%, following a growth of 1.8% in 2018 and of 3% in 2017 (source: Statistics Canada). The labour market remains solid, with an unemployment rate that stood at 5.6% in February 2020. The last quarter of 2019 saw a slowdown that, according to the most recent estimates, could be extended partially in to 2020.

In the attempt of boosting the economy, at the beginning of March 2020 the Canadian Central Bank cut the interest rate by half a percentage point (from 1.75% to 1.25%), after several months of stability. Among the causes that the BoC deems could have a negative impact on the consolidation of a stable growth trend are the general uncertainty around the international economic situation resulting from the spread of COVID-19, but also some internal factors. In particular, investments are being affected; in 2019 they settled in negative territory compared to the previous year, due mostly to difficulties encountered in the energy sector. Consumption is growing but at a lower pace than in 2018 and, despite high levels of household debt, it remains the main source of growth. Inflation remains fairly stable and stands at a rate close to 2%, a target set by the Monetary Authority.

With regard to international trade, Canada improved its trade balance in 2019, from -11.6 billion CAD in 2018 to -8.7 billion CAD in 2019 (source: Statistics Canada). Canada is a country with an economy open to international trade (about a third of GDP comes from exports). It is to be noted that the so-called "New NAFTA", the Canada-United States-Mexico Agreement (CUSMA), signed in November 2018, already ratified by Mexico and the USA, is awaiting ratification by Canada, the last step before its entry into force.

Bilateral relations

Italy enjoys excellent commercial relations with Canada; according to Statistics Canada, in 2019 Italy was the seventh supplier country of the Canadian market, second in Europe after Germany, surpassing the United Kingdom.

In 2019, exports of Italian goods to Canada amounted to 9.45 billion CAD, an increase of 5.0% compared to the previous year, against 3.2 billion CAD of Canadian exports to Italy (source: Statistics Canada). The trade balance, therefore, recorded a very significant positive balance for Italy, in the order of $ 6.2 billion.

The main sectors of our export include machinery, chemicals, motor vehicles and means of transport, drinks and spirits (wine in particular) and food products. In this last sector, Italy is Canada's first European supplier (fourth worldwide).

In 2019, in particular, there was a strong growth in the chemical-pharmaceutical sector (+15%), jewelry and precious stones (+48%) and machinery (+9%). The food sector also registered a growth, recording a 5.9% increase (including the export of drinks and spirits), and surpassing one billion Canadian dollars in value.

Canadian exports to Italy mainly involve the mining, chemical and pharmaceutical sectors.

Canada remains an attractive country for Italian companies, also thanks to a favorable investment environment. There is a growing interest from Italian companies in sectors such as energy, infrastructure, manufacturing, as well as information and communication technologies.