8 million U.S. jobs supported by trade and investment with Canada
Canada is the biggest market for U.S. exports and the second biggest source of U.S. imports, behind China. It is also a significant foreign
supplier of direct investment to the U.S.
In a recent study for the Canadian Embassy in Washington DC, CoPS researchers quantified the role of Canada in supporting jobs in the U.S. through
trade and investment.
To calculate the dependence of U.S. employment on trade with Canada, they used an economic model to look at how employment in the U.S. would be
affected by a cessation of Canada/U.S. trade. In this way they found that Canada/U.S. trade:
supports 7.88 million jobs in the U.S.
This is about 4.53 per cent of U.S. employment.
has a net positive effect on GDP of 5.8 per cent resulting from a positive effect on output in 476 industries and a negative effect in 57
industries. The most obvious U.S. beneficiaries are industries with a heavy reliance on exports to Canada. However many other industries benefit
from the availability of imported inputs from Canada. The only U.S. industries that lose from Canada/U.S. trade are those that face strong
competition from Canadian imports. But of course this import competition has beneficial effects in keeping prices down in the U.S. for business
inputs and for consumer goods.
has a positive effect on employment in every state and the District of Columbia. Because of links between states, even states that have little
direct connection with Canada/U.S. trade are beneficiaries.
To calculate the dependence of U.S. employment on Canadian direct investment the CoPS team used statistics from the Bureau of Economic Analysis on
U.S. employment in Canadian-majority-owned affiliates operating in the U.S. They found that Canadian direct investment:
supports 0.47 million employees in the U.S. This is about 0.39 per cent of employee jobs in the U.S.
provides more than 1 per cent of U.S. employee jobs in Manufacturing, Information, and Finance & insurance.
provides jobs in every state and the district of Columbia. In Delaware, Kansas, Nevada, Maine, New Hampshire, Minnesota, Alaska,
Massachusetts, Arizona, South Dakota, Wisconsin, Alabama, Vermont and Washington., Canadian-majority-owned affiliates provide more than 0.5 per
cent of employee jobs.
The study is available here. A later similar study is available here.