OTTAWA — Canada’s trade gap unexpectedly widened to a record deficit in June as imports of motor vehicles and parts jumped, while the increase in exports was lacklustre, data from Statistics Canada showed on Friday.

The $3.63 billion deficit was greater than the $2.82 billion that economists had expected. Exports were up just 0.6 per cent in June, but that was largely due to a jump in prices, with volumes down 1.4 per cent.

Overall exports were lifted by a 7.2 increase for energy products as prices for crude oil and bitumen rose. But excluding energy products, exports were down 0.4 per cent.

Canada’s job numbers also disappointed Friday, with the economy losing 31,200 jobs in July — enough to push the unemployment rate to 6.9 per cent, up from 6.8 per cent the previous month.

“While both figures are worse than expectations, the trade data are probably the bigger disappointment,” wrote BMO chief economist Douglas Porter. “While we still believe the BoC is likely to stay on the sidelines for a prolonged period (even if the Fed resumes tightening), the ugly export trend keep the slim chances of BoC easing alive.”

In the second quarter, exports tumbled 4.7 per cent, the largest decline since the second quarter of 2009. After a strong start to the year, economists expect this drop, along with the disruption to oil production caused by wildfires in northern Alberta, to weigh on economic growth data for the second quarter.

Imports rose 0.8 per cent in June, led by record levels of motor vehicles and parts. Overall volumes were up 0.7 per cent.

Canada’s trade surplus with the United States, its largest trading partner, narrowed to $1.81 billion as imports from south of the border rose 1.5 per cent.

Still, higher exports to other countries, including the United Kingdom and Spain, helped narrow Canada’s trade deficit with nations other than the United States to $5.44 billion.

© Thomson Reuters 2016

Monthly Report on Canada's International Merchandise Trade Performance, January 2017

PDF Version (231 KB)

http://www.international.gc.ca/economist-economiste/performance/monthly-mensuel.aspx?lang=eng

Canada’s exports reached a record high in January and Canada’s trade balance with the world recorded a third consecutive monthly surplus.

Trade Balance

• Canada’s trade surplus with the world improved to $807 million in January, up from $447 million in December. 

Exports

• Exports were up 0.5% in January, to $46.5 billion, with exports to the United States increasing 2.3%.
• The increase was led by motor vehicles and canola.
• Exports were up to the United States, but declined to countries other than the U.S.

Imports

• Imports edged down 0.3% in January, to $45.6 billion, on lower imports of unwrought gold.
• Most imports sectors posted declines.
• Imports from the United States recorded a slight increase, while imports from countries other than the United States decreased in January. 

Chart 1: Value of Canada's trade in goods, January 2012 to January 2017

Source: CANSIM Table 228-0059, Merchandise imports and exports, Balance of payments basis, seasonally adjusted.

Text Version

Background

Canadian Merchandise Exports

Canadian merchandise exports: Exports were up 0.5% (or $237.2 million), to $46.5 billion in January, despite 6 of 11 sectors recording declines. Higher exports of motor vehicles and parts (+7.7%, to $7.8 billion), as well as farm, fishing and intermediate food products (+12.8%, to $3.1 billion) contributed to this increase. The former reached a record high, largely led by higher Chinese demand for Canadian canola.

In January, exports were up 1.8%, or $840.4 million, compared to January 2016.

Canadian Merchandise Imports

Canadian merchandise imports: Imports edged down 0.3%, to $45.6 billion, with 7 of 11 sectors posting declines. Imports of metal and non-metallic mineral products fell 5.5% to $3.8 billion and imports of machinery, equipment and parts decreased by 4.3%, to $4.1 billion.

In January, imports were down 2.1%, or $971 million, compared to January 2016.  

United States:

• Canada’s trade surplus with the United States widened to $4.5 billion in January, from $3.8 billion in December.
• Exports to the United States rose 2.3% to $34.6 billion in January, on higher exports of passenger cars and light trucks.
• Imports from the United States increased 0.3% to $30.1 billion.

Countries other than United States:

• Canada’s trade deficit with countries other than the U.S. increased to $3.7 billion in January, from $3.4 billion in December.
• Exports to non-U.S. countries fell 4.4% to $11.8 billion.
• Lower exports to Switzerland (-$298 million) and Spain (-$200 million) – both due to fewer aircraft exports – contributed to the decline.
• Imports from countries other than United States decreased 1.3% to $15.5 billion, led by fewer imports of passenger cars and light trucks from Japan.

Commodities/Products

In January, exports rose 0.5% to $46.5 billion, despite declines in 6 of 11 sectors. Export volumes increased 1.0% while export prices edged down 0.5%.

Export highlights

• Exports of motor vehicles and parts rose 7.7% to $7.8 billion.
• Exports of passenger cars and light trucks increased 12.3% to $5.4 billion.
• Exports of farm, fishing and intermediate food products increased 12.8% to $3.1 billion, on larger volumes.
• Exports of canola rose 38.4% to a record high of $845 million and have more than doubled since October.
• Exports of metal ores and non-metallic minerals increased 5.9% to $1.6 billion.
  • On higher exports of metal ores and concentrates (+53.8% to $960.5 million).
• Exports of consumer goods decreased 3.9% to $6.0 billion.
• Exports of food, beverage and tobacco products fell 4.1% to $2.7 billion.
• Exports of metal and non-metallic mineral products fell 4.6% to $4.9 billion.

In January, imports were down 0.3% to $45.6 billion, with declines in 7 of 11 sectors. Import volumes were up 2.5% while imports prices decreased 2.7%.

Import highlights

• Imports of motor vehicles and parts were up 3.6% to $8.9 billion, returning to October’s level.
  • Imports of passenger cars and light trucks rose 10.9% to $4.1 billion, mainly on a rise in imports from the United States and the United Kingdom. 
• Imports of metal and non-metallic mineral products fell 5.5% to $3.8 billion.
• Imports of electronic and electrical equipment and parts were up 1.5% to $5.4 billion. 
  • Imports of communications and audio and video equipment increased 9.2% to $1.8 billion.

Source: CANSIM 228-0059, North American Product Classification System 2007 – seasonally adjusted. Totals don’t add up as “Special transactions trade” and “Other balance of payments adjustments” are not included.