Canada’s international trade position improved modestly in July.
The merchandise trade deficit with the world decreased to $4.9 billion in July, down from $6.0 billion in June. Exports rose 0.9 per cent, while imports slipped 0.7 per cent. In real terms, exports grew 1.6 per cent and imports fell 0.9 per cent.
Energy exports led the July increase, climbing 4.2 per cent after five straight months of decline. Crude oil exports advanced 2.3 per cent. Nuclear fuel and other energy products surged nearly 50 per cent, while coal shipments rose more than 28 per cent. The gains helped offset earlier weakness and brought total exports up three per cent since April’s sharp 11.2 per cent drop.
The automotive sector also posted strong results. Exports of motor vehicles and parts grew 6.6 per cent in July, an unusual rise during the typical summer shutdown at Canadian assembly plants. Passenger cars and light truck exports rose 10.8 per cent on a seasonally adjusted basis.
At the same time, metal and mineral exports weakened. Shipments of metal and non-metallic mineral products fell eight per cent, because of a 12.2 per cent decline in unwrought gold, silver, and platinum group metals. Unwrought aluminum and alloys plunged 31 per cent, marking the fourth consecutive monthly decline and the lowest level since 2019. Despite back-to-back drops, unwrought gold exports in July remained more than 25 per cent higher than a year earlier.
Imports fell overall but remained resilient in most categories. The monthly decline was tied to the absence of a one-time delivery of offshore oil project equipment in June, which had added more than $2 billion to industrial machinery imports. Excluding that factor, imports would have grown 2.2 per cent. Ten of the 11 main product groups showed increases, including aircraft and transportation equipment, motor vehicles and parts, consumer goods, and farm, fishing and food products.
Trade flows with the United States continued to dominate. Exports to the U.S. rose five per cent in July, bolstered by energy and automotive shipments, though they remain 2.9 per cent lower year-to-date than in 2024. Imports from the U.S. dropped 2.2 per cent, marking the fourth decline in five months. As a result, Canada’s trade surplus with its largest partner widened to $6.7 billion in July from $3.7 billion in June, the largest surplus since March.
Exports to other countries weakened for a second month, falling 8.6 per cent in July. Lower shipments to the United Kingdom, the Netherlands and Spain were the main contributors. On a year-over-year basis, however, exports to non-U.S. markets were still up 14 per cent. Imports from them increased 1.3 per cent, widening Canada’s deficit with non-U.S. countries to $11.7 billion from $9.7 billion in June.
Services trade offered additional support. Exports of services increased 2.6 per cent to $18.7 billion, while imports slipped 1.3 per cent to $18.2 billion. Combined with goods, total exports rose 1.3 per cent to $80.6 billion and imports fell 0.9 per cent to $85.0 billion. The overall trade deficit, including goods and services, narrowed to $4.4 billion in July from $6.2 billion the previous month.
The Canada Border Services Agency’s digital initiative for trade assessments prompted revised estimates for recent months. June’s imports were revised downward to $67.3 billion from $67.6 billion, while exports were adjusted to $61.3 billion from $61.7 billion.