Canada’s merchandise trade deficit narrowed in September as both exports and imports saw minor declines. The trade gap with the world decreased to $1.3 billion from August’s $1.5 billion, reflecting nuanced shifts across key sectors and fluctuations in demand and pricing.
Canada’s exports edged down 0.1% in September, marking a third consecutive month of decline. Lower prices, particularly in the metal and energy sectors, drove this overall reduction, though real or volume-based exports rose by 1.4%.
Metal exports, specifically unwrought gold, silver, and platinum group metals, dropped significantly, with a 5.4% decrease primarily attributed to a 15.4% reduction in gold exports. The decline, which affected shipments to the United Kingdom and the United States, reflected volatile global demand for precious metals. Despite the recent monthly drop, exports of this category surged by 32.1% in 2024 compared to the same period last year.
Energy product exports also fell, decreasing by 2.6%, mainly due to reduced crude oil prices. This marks the second month of consecutive declines in crude oil exports, as concerns over global demand weigh on prices.
Conversely, certain sectors saw positive performance. Aircraft exports grew by 10.3% in September, driven by increased demand for private jets in the U.S. market. Forestry and building materials, specifically pulp and paper, also rebounded, with a 5.3% increase following disruptions in August due to rail stoppages.
Canada’s imports fell by 0.4% in September, a change attributed largely to a 12.7% reduction in metal and mineral imports, specifically in unwrought gold. This segment experienced a steep 46.4% drop in imports from key trading partners, such as Switzerland and the United Kingdom, after significant fluctuations earlier in the year.
On the other hand, energy imports rose by 13.6%, reflecting increased purchases of refined petroleum from Singapore, the United States, and the Netherlands. After four consecutive months of lower import levels, demand for refined petroleum saw a notable resurgence.
Additionally, the CBSA’s new Assessment and Revenue Management (CARM) system influenced trade reporting, particularly impacting special transactions. In September, special transactions imports reached $2.4 billion, nearly double August’s value, as certain records are expected to be redistributed to other categories as data revisions continue.
Canada’s trade with the United States showed a surplus increase to $8.3 billion, up from $7.8 billion in August. Exports to the United States grew by 1.6%, fueled by aircraft and gold shipments, while imports from the U.S. rose by 0.8%.
However, Canada’s trade balance with countries other than the United States saw a widening deficit, increasing from $9.3 billion in August to $9.6 billion in September. This was primarily due to reduced exports to the United Kingdom and Switzerland, coupled with lower imports from Switzerland and the Netherlands.
On a quarterly basis, Canada’s export and import values both declined slightly. Exports fell 0.2%, largely influenced by a 3.8% decrease in motor vehicle and parts exports. Imports showed a minor reduction of 0.1%, with motor vehicle imports declining by 6%, partially offset by gains in metal and mineral products.
In real terms, which adjust for price changes, exports increased by 0.3% in the third quarter, thanks in part to new crude oil deliveries through the Trans Mountain pipeline. Imports in real terms decreased by 0.2%, driven by reduced vehicle imports.
August’s trade data also saw slight adjustments. Exports were revised down to $64.0 billion from the initial $64.3 billion, while imports remained stable at $65.4 billion.
Canada’s trade in services added to the mixed picture, with service exports rising by 1.6% to reach $17.2 billion in September, and service imports increasing by 0.3% to $18.4 billion. Combined with goods, Canada’s total trade deficit with the world was reduced to $2.5 billion in September from $2.9 billion in August.
September’s data reflect both sector-specific challenges and broader trends in global markets. Lower prices in key exports like crude oil and gold indicate persistent volatility while rising energy imports suggest a rebalancing of global energy flows.