In May 2024, Canada’s international merchandise trade landscape experienced a notable shift, with both exports and imports declining, resulting in an expanded trade deficit. According to Statistics Canada, merchandise exports decreased by 2.6%, while imports fell by 1.6%, widening the trade deficit from $1.3 billion in April to $1.9 billion in May. This marks the third consecutive month of deficit, signaling ongoing challenges in the trade sector.
The decline in exports was broad-based, affecting 8 of the 11 major product sections. Total exports dropped to $62.4 billion, the lowest level since July 2023. In real terms, exports fell by 1.7%. A significant contributor to this decline was the volatility in the export of gold and other metal and non-metallic mineral products. Exports in this category fell by 7.0%, with unwrought gold, silver, and platinum group metals and their alloys experiencing the largest drop of 17.1%.
Energy product exports also saw a decrease, falling by 2.4% due to lower prices. Notably, crude oil and bitumen exports declined by 2.8%, primarily driven by reduced prices rather than volume changes. The export of natural gas liquids, particularly propane to Japan, plummeted by 24.6% following a substantial increase in April.
The aircraft and transportation equipment sector saw an 11.5% decline in exports, mainly due to a 28.2% drop in aircraft exports. This followed an unusually strong performance in April, where business jet exports to various countries had surged. Similarly, metal ores and non-metallic minerals exports fell by 13.3%, driven by a significant decrease in copper ores and concentrates, which dropped by 36.2%.
Despite these declines, there was a positive note in the motor vehicles and parts sector, where exports increased by 3.6%. This was largely due to an 8.4% rise in exports of passenger cars and light trucks, reflecting higher sales of Canadian-manufactured light trucks to the United States.
On the import side, total imports fell by 1.6% to $65.4 billion. This decrease followed a 1.3% increase in April, with declines observed in 6 of the 11 major product sections. In real terms, imports dropped by 1.3%.
The most significant decline in imports was seen in the metal and non-metallic mineral products category, which fell by 10.0%. This was primarily due to a 45.9% decrease in imports of unwrought gold, silver, and platinum group metals and their alloys. The sharp decline followed strong increases in March and April, marking a return to more typical import levels.
Imports of motor vehicles and parts also decreased by 4.4%, following three consecutive monthly gains. Notably, imports of passenger cars and light trucks dropped by 7.1%, affected by production and shipment delays of key models to Canadian dealerships.
Energy product imports continued their downward trend, falling by 11.6% in May, marking the third consecutive monthly decrease. Crude oil and crude bitumen imports declined by 15.1%, largely due to reduced shipments from the United States. Similarly, imports of refined petroleum energy products decreased by 14.2%, impacted by lower prices and reduced imports of aviation fuel from the United States and India.
Conversely, imports of metal ores and non-metallic minerals rose by 27.3%, driven by higher imports of other metal ores and concentrates, particularly gold for refining from countries such as Brazil, Mauritania, Chile, and Guyana. Imports of copper ores and concentrates more than doubled, with increased shipments from Chile.
Despite the overall decline in total exports, exports to the United States rose by 0.8% in May, with light trucks contributing significantly to this increase. Imports from the United States fell by 1.7%, leading to a widened trade surplus with the U.S., from $7.1 billion in April to $8.2 billion in May.
In contrast, trade with countries other than the United States experienced a significant setback. Exports to these countries dropped by 12.9%, the largest percentage decrease on record since 1997. This was primarily due to lower exports to the United Kingdom, Japan, and Saudi Arabia. Imports from countries other than the United States saw a modest decline of 1.4%, with notable decreases from the United Kingdom and Germany. Consequently, Canada’s trade deficit with countries other than the United States widened from $8.4 billion in April to $10.1 billion in May.
Revisions to April’s data indicated a slight adjustment in the values of both imports and exports. Additionally, trade in services showed a mixed performance in May. Service exports increased by 0.5% to $17.0 billion, while service imports edged down by 0.2% to $18.1 billion. When combined, the total trade deficit in goods and services widened from $2.5 billion in April to $2.9 billion in May.