Canada’s merchandise trade deficit showed signs of improvement in October 2024. The exports rose by 1.1% compared to the previous month, while imports increased by a more modest 0.5%. As a result, Canada’s trade deficit with the world shrank from $1.3 billion in September to $924 million in October.
October marked a welcome rebound for Canadian exports, following a three-month streak of declining numbers. However, the growth in exports was driven largely by higher prices, rather than a significant increase in volume. The total value of exports rose by 1.1%, but in real terms, the increase was just 0.4%.
The most significant growth came from the metal and non-metallic mineral products sector, which saw a 10.6% increase. A key contributor to this rise was the export of unwrought gold, silver, and platinum group metals, which jumped 20.9% in October. Most of this increase came from higher shipments of gold to the United Kingdom and Hong Kong, continuing a trend seen over the past year. From January to October 2024, exports of unwrought gold alone have increased by 30.2% compared to the same period in 2023.
Another bright spot for exports was the pharmaceutical sector, which saw a 36.8% jump in October. This was largely due to a sharp increase in shipments of medicinal products to the United States, marking a strong recovery after two months of sharp declines.
However, not all sectors performed equally well. Exports of industrial machinery and parts were down 3.7%, with commercial and service industry machinery, in particular, experiencing a steep 31.5% drop. This decline was largely attributed to lower exports of flight simulators to the U.S.
On the import side, Canada’s merchandise imports rose by 0.5% in October, following a 1.0% decline in September. Higher imports of metal ores and non-metallic minerals (+46.1%) and energy products (+6.2%) helped push the total up. However, this increase was partially offset by declines in imports of consumer goods (-1.6%) and certain industrial products, including chemicals and plastics (-2.3%).
Import data for October was subject to some revisions due to delays in the processing of data at the Canada Border Services Agency (CBSA). The new digital initiative, CARM (Canada Border Services Agency Assessment and Revenue Management), led to the use of estimated values for some imports. This means the data for October could be revised in future reports as the agency completes the processing.
Canada’s trade with the United States showed a slight contraction in October. Exports to the U.S. dropped by 2.8%, while imports from the U.S. rose by 1.1%. This resulted in a narrowing of Canada’s trade surplus with its southern neighbor, from $7.9 billion in September to $6.2 billion in October.
In contrast, trade with countries other than the U.S. performed more positively. Exports to these countries increased by 13.1%, primarily driven by a surge in gold exports to the United Kingdom and Hong Kong. Imports from these countries fell slightly by 0.5%, which helped reduce Canada’s trade deficit with non-U.S. countries from $9.2 billion in September to $7.1 billion in October.
When considering both goods and services, Canada’s overall trade picture showed some improvement. Total exports, including services, rose by 1.0% to $82.5 billion in October, while imports increased by 0.8% to $83.5 billion. As a result, Canada’s combined trade deficit narrowed slightly from $1.1 billion in September to $1.0 billion in October.
The latest numbers suggest that while Canada’s trade balance remains negative, the overall trend is one of modest improvement. The rebound in exports, particularly in sectors like metals and pharmaceuticals, provides a positive outlook for Canada’s international trade. However, challenges such as global price fluctuations and ongoing delays in data processing highlight the complexities of managing trade flows in a rapidly changing world economy.