Canada’s merchandise trade balance with the world posted a $3.6 billion deficit in June, widening from a $1.4 billion deficit in May. Exports fell 4.3% to $46.5 billion in June. This sharp decrease was mainly due to lower exports of unwrought gold and energy products. Imports edged up 0.3% to $50.1 billion, led by an increase in gold bullion.
Decline in exports mainly due to prices
Following three consecutive monthly record highs, total exports fell 4.3% to $46.5 billion in June, as 9 of 11 sections decreased. Prices were down 2.7%, with widespread declines throughout the commodity sections. Export volumes (-1.7%) were also down. Metal and non-metallic mineral products and energy products were the largest contributors to the decrease in export values in June. Exports excluding energy products declined 3.4%. Year over year, total exports were up 12.4%.
Exports of metal and non-metallic mineral products decreased 14.9% to $5.3 billion in June, following a 12.4% increase in May. Unwrought precious metals and precious metal alloys—mainly unwrought gold to the United Kingdom—were down $809 million in June. This follows a record high in May due to an increase in gold transfers within the banking sector. For the section as a whole, volumes decreased 10.0% and prices were down 5.5%.
Also contributing to the overall decrease in June were lower exports of energy products, down 9.2% to $7.3 billion. Exports of crude oil and crude bitumen fell 7.4% to $4.6 billion, the fourth consecutive monthly decline. This was an atypical decrease for crude oil in June, a month that usually sees increases. Exports of other energy products, mostly coal, also fell in June, down 26.5% to $497 million. This follows three consecutive monthly increases of coal exports. Overall, prices in the section were down 6.1% and volumes decreased 3.3%.
Higher imports led by gold bullion
Sustained growth in total imports slowed in June, edging up 0.3% to $50.1 billion. Volumes rose 0.8% while prices fell 0.5%. Metal ores and non-metallic minerals and aircraft and other transportation equipment and parts contributed the most to the increase. Year over year, imports were up 10.4%.
Imports of metal ores and non-metallic minerals rose 39.1% to a record high $1.3 billion in June, mostly on higher volumes. Other metal ores and concentrates (+48.8%) were responsible for the increase, mainly on stronger imports of gold bullion from Japan and Egypt for refining purposes.
Imports of aircraft and other transportation equipment and parts rose 11.7% to a record high $2.3 billion in June. Higher imports of aircraft (+30.4%) and ships, locomotives, railway rolling stock, and rapid transit equipment (+71.2%) led the gain. The import of new airliners and railcars for the transportation of petroleum from the United States contributed the most to the growth.
Largely offsetting these gains were lower imports of motor vehicles and parts, down 3.2% to $9.4 billion, with widespread decreases throughout the section. The overall decrease follows five consecutive monthly increases.
Lower exports to the United States
Exports to the United States were down 4.5% to $34.5 billion in June, mostly on lower exports of crude oil. Imports from the United States fell 0.7% to $32.4 billion, also on lower imports of crude oil. As a result, Canada’s trade surplus with the United States narrowed from $3.5 billion in May to $2.2 billion in June, the smallest surplus since June 2016. The Canadian dollar gained 1.7 cents US relative to the American dollar in June.
Exports to countries other than the United States were down 4.0%, mainly on lower exports of unwrought gold to the United Kingdom as well as lower exports of coal to Japan. Imports from countries other than the United States were up 2.1%, led by Brazil (bauxite) and South Korea (passenger cars). Consequently, Canada’s trade deficit with countries other than the United States widened from $4.9 billion in May to $5.8 billion in June.
Widening of the quarterly trade deficit
On a quarterly basis, imports rose 5.6% from the first quarter to a record high $148.7 billion in the second quarter. Increases were observed in all commodity sections.
Exports increased 2.8% to a record high $142.7 billion in the second quarter. Metal and non-metallic mineral products and motor vehicles and parts led the quarterly increase.
As a result, Canada’s merchandise trade deficit with the world widened from $2.0 billion in the first quarter to $5.9 billion in the second quarter.
Real trade balance in a deficit in June
In real (or volume) terms, imports were up 0.8% while exports fell 1.7% in June. Consequently, Canada’s trade balance in real terms went from a $630 million surplus in May to a $423 million deficit in June.
Both imports and exports increased 2.9% in real terms in the second quarter. Canada’s trade surplus in real terms therefore widened slightly from $851 million in the first quarter to $955 million in the second quarter.
Revisions to May exports and imports
Revisions reflected initial estimates being updated with or replaced by administrative and survey data as they became available, as well as amendments made for late documentation of high-value transactions. Exports in May, originally reported as $48.7 billion in last month’s release, were revised to $48.6 billion in the current month’s release. Imports, originally reported as $49.8 billion in last month’s release, were revised to $50.0 billion.