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Bombardier aerospace in East Belfast, Northern Ireland (PETER MORRISON/Peter Morrison/AP)
Bombardier aerospace in East Belfast, Northern Ireland (PETER MORRISON/Peter Morrison/AP)

Offshoring and inshoring in the balance Add to ...

There's been a lot of angst in Canada about companies shipping jobs and production offshore, particularly as the loonie has climbed to par and beyond in the past decade.



But a new study by the Department of Foreign Affairs and International Trade suggests that concern may be misplaced.



Relatively few Canadian companies are offshoring or outsourcing their activities, according to the study, part of the department's annual Canada's State of Trade 2010 report.

And almost as rare is the practice of repatriating activities to Canada from other countries.



"The trends appear to me much more circular than is commonly thought," the report concludes. "A roughly similar number of activities appear to be moving into Canada as out."



The conclusions are based on Statistics Canada's Survey of Innovation and Business Strategy, which included responses from roughly 4,300 companies.



Overall, just 1.9 per cent of Canadian-based companies moved an activity to a foreign country between 2007 and 2009. In manufacturing, the percentage was higher at 5.2 per cent, but still relatively low.



At the same time, 1.8 per cent of companies (and 5 per cent of manufacturers) shifted work into Canada -- so-called inshoring.



That may be so. But it doesn't paint a complete picture of what's going on. What matters more than the share of companies engaged in offshoring -- or inshoring -- is the number of jobs and activity affected. General Motors Canada or Bombardier moving all of their operations to another country would be a lot more economically significant than two small companies doing the same.



So it seems a bit of a stretch to conclude, as the DFAIT report does, that offshoring is "subdued."



That might be true, but you would want to see a lot more data to make that judgment.



Follow on Twitter: @barriemckenna

 

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