Canadian international merchandise trade

Released by Stats Can:  2019-03-06

Canada’s exports declined 3.8% in December, almost entirely on lower exports of energy products, which were down as a result of falling crude oil prices. Imports were up 1.6%, mainly on higher imports of energy products. As a result, Canada’s merchandise trade deficit with the world widened from $2.0 billion in November to a record $4.6 billion in December.

Energy products lead the decrease in exports

Total exports were down 3.8% to $46.3 billion in December, the fifth consecutive monthly decline since the record set in July. Exports have fallen 9.8% or by $5.0 billion since July, with energy products being responsible for 80% of the decrease. Excluding energy products, exports were essentially unchanged in December. Overall, export prices decreased 2.4% and volumes were down 1.4%.

Exports of energy products fell 21.7% to $6.4 billion in December, the lowest level since July 2016. Crude oil exports declined 28.7% to $3.3 billion, down by more than half since peaking in July 2018. Following a 29.7% decline in November, crude oil export prices (-25.8%) were once again largely responsible for the decrease in December. Despite ending the year with five consecutive monthly declines, crude oil export values were up 19.7% in 2018 compared with 2017.

Exports of metal and non-metallic mineral products also contributed to the decline in December, down 9.8% to $4.9 billion, mainly on lower exports of gold to the United Kingdom and Hong Kong. This was mainly the result of reduced transfers of gold within the banking sector in December.

The overall decrease in December was partially offset by higher exports of aircraft and other transportation equipment and parts, which rose 16.0% to $2.4 billion, mostly on increased exports of aircraft engines to the United States.

Imports of energy products increase

Total imports rose 1.6% to $50.9 billion in December, mainly on higher volumes. Increased imports of energy products, motor vehicles and parts, and metal ores and non-metallic minerals were partially offset by lower imports of aircraft and other transportation equipment and parts.

Imports of energy products rose 19.7% to $3.3 billion in December. Refined petroleum energy products (+33.2%) contributed the most to the increase, mainly on higher imports of diesel and biodiesel fuels. This coincided with recent maintenance and turnaround work at some Canadian refineries, increasing the demand for foreign refined petroleum energy products. In 2018, imports of refined petroleum energy products reached the highest level on record.

Imports of motor vehicles and parts were up 4.0% to $9.4 billion in December. Following three consecutive monthly declines, imports of passenger cars and light trucks (+8.7%) led the increase in December. For 2018 as a whole, imports of passenger cars and light trucks were down 1.7% compared with the record set in 2017, reflecting a slowdown in sales.

Imports of metal ores and non-metallic minerals increased 32.8% to a record high $1.4 billion in December. Following two consecutive monthly declines, imports of other metal ores and concentrates (+43.0%) increased in December on higher imports of bauxite and aluminum oxide (used in the production of aluminum) from Brazil.

Partially offsetting the overall increase in December were lower imports of aircraft and other transportation equipment and parts, which fell 24.9% to $1.7 billion. After three consecutive monthly gains, imports of aircraft (-75.9%) posted the largest decline, mostly on lower imports of airliners from the United States. Despite the decrease in December, imports of aircraft in 2018 were the highest since 2015.

Record imports from non-US countries

Imports from countries other than the United States rose 9.2% to a record $19.0 billion in December. Widespread increases were led by higher imports from Brazil (bauxite and aluminum oxide), China (various products) and the Russian Federation (crude oil).

Exports to countries other than the United States were down 4.2% to $12.6 billion. Lower exports to the United Kingdom and Hong Kong (gold in both cases) were partially offset by higher exports to China (various products). As a result, Canada’s trade deficit with countries other than the United States widened from $4.2 billion in November to $6.4 billion in December.

Following a 5.0% decrease in November, exports to the United States were down 3.6% to $33.7 billion in December, mostly on lower crude oil exports. Imports from the United States were down 2.4% to $31.9 billion, mainly on lower imports of aircraft. As a result, Canada’s trade surplus with the United States narrowed from $2.2 billion in November to $1.8 billion in December. Comparing the average exchange rates, the Canadian dollar lost 1.4 US cents relative to the American dollar from November to December.

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