Canada’s international merchandise trade deficit widened to $5.9 billion in June, as a surge in imports driven by a one-time high-value oil project shipment outpaced modest gains in exports.
Total imports rose 1.4 per cent to $67.6 billion, marking the first increase in four months. The growth was largely attributed to a significant delivery of industrial machinery destined for an offshore oil project near Newfoundland and Labrador. Excluding this single transaction, overall imports would have declined 1.9 percent.
Meanwhile, exports increased 0.9 percent to $61.7 billion, supported by stronger sales of energy and agricultural products. Despite the gain, exports remain well below March highs and continue to face headwinds from global pricing volatility.
The June data reflect continued trade imbalances amid weakening vehicle production, shifting commodity flows, and the impact of new digital customs reporting under the Canada Border Services Agency’s CARM initiative.
Imports of industrial machinery, equipment and parts surged 27.7 per cent in June, led by a shipment valued at more than $2 billion related to offshore oil development.
Motor vehicle imports also rose 2.9 percent after two months of declines, driven by a 6.9 percent increase in passenger cars and light trucks, largely from Mexico. However, engine and parts imports fell 4.8 percent.
Consumer goods imports dropped 4.8 percent, with pharmaceutical products and miscellaneous goods posting the sharpest declines. Imports of unwrought precious metals, primarily gold, also fell steeply, down 63.7 per cent after elevated shipments in previous months.
June marked the second consecutive month of export growth, following a sharp 11.3 per cent decline in April, the largest monthly drop in five years. Energy exports rose 3.8 per cent, the first increase since January, driven by higher prices for crude oil and refined petroleum products. Diesel shipments to the United States were strong.
Farm, fishing and intermediate food products climbed 6.7 per cent, with live animal exports up 41.6 per cent and canola rising 19.1 per cent. These increases helped offset weakness in other sectors.
Exports of motor vehicles and parts declined 4.2 per cent, with passenger car and light truck exports falling below $4 billion for the first time since November 2022. Metal exports also contracted, with unwrought gold, aluminum, and steel all down sharply.
Exports to the United States rose 3.1 percent in June, widening Canada’s trade surplus with its largest trading partner to $3.9 billion. However, compared to the previous year, exports to the U.S. were down 12.5 percent.
Imports from the U.S. increased 2.6 per cent, ending a three-month slide. The boost was largely due to the high-value oil module shipment.
Exports to countries other than the U.S. fell 4.1 per cent after reaching record levels in May, driven by lower shipments to the United Kingdom and Japan. Shipments to China increased, led by canola and copper ore. Imports from non-U.S. countries edged down 0.3 percent, but the trade deficit with these nations widened to $9.8 billion.
Despite a strong start to the year, total exports fell 12.8 per cent in the second quarter, largely due to declines in energy, vehicle and consumer goods. Compared to the same period in 2024, exports were down 5.4 percent.
Imports decreased 3.9 percent quarter-over-quarter due to weaker demand for vehicles and consumer goods. Higher imports of minerals and metals partially offset the decline.
Canada’s merchandise trade deficit widened dramatically from $388 million in the first quarter to $19.0 billion in the second quarter, the largest on record. In volume terms, real exports dropped 9.0 percent, while imports slipped 1.5 percent.
Service exports rose 1.0 percent to $18.0 billion in June, while imports edged down 0.2 percent to $18.7 billion. Combined, Canada’s total trade deficit stood at $6.5 billion in June, up slightly from $6.4 billion in May.
Revisions to May data showed exports were higher than previously reported, at $61.2 billion instead of $60.8 billion. Imports were largely unchanged.