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Canadian international merchandise trade, June 2019

Released: 2019-08-02

Canada's exports were down 5.1% in June, while imports fell 4.3%, both due in part to significant decreases in crude oil, as well as aircraft and other transportation equipment and parts. As a result, Canada's merchandise trade balance remained in a surplus position, settling at $136 million after posting a $556 million surplus in May. The narrow surplus in June represented 0.1% of total monthly merchandise trade and is within the typical margins for revisions to the trade balance in subsequent months.

Chart 1  Chart 1: Merchandise exports and imports
Merchandise exports and imports

Exports retreat after surge in May

Total exports decreased 5.1% in June to $50.3 billion, more than offsetting the strong gain observed in May. There were widespread decreases throughout the product sections, with 10 of 11 sections posting declines. Export prices (-3.6%) played an important role in the decrease this month. Year over year, total exports were down 0.9%. In June, non-energy exports fell 4.4%.

Chart 2  Chart 2: Product contribution to June export movement
Product contribution to June export movement

Exports of energy products decreased 7.4% in June to $10.0 billion. Exports of crude oil were down 8.6%, the first monthly decrease in 2019. Exports of crude oil have more than doubled since the low observed in December 2018, largely because of higher crude oil prices. In June, crude oil export prices fell 13.5%, while volumes rose 5.6%.

Chart 3  Chart 3: Canadian exports of crude oil and bitumen
Canadian exports of crude oil and bitumen

Exports of aircraft and other transportation equipment and parts were down 25.1% to $2.2 billion in June. Exports of aircraft (-40.8%) led the decline, mainly on lower shipments of commercial aircraft to the United States. Despite the decline, exports of aircraft increased 39.4% in the second quarter compared with the previous quarter, and were up 5.4% compared with the second quarter of 2018. Also contributing to the decrease, exports of boats and other transportation equipment fell by more than half in June as a result of lower exports of other transportation equipment to Saudi Arabia.

Widespread decrease in imports led by aircraft and crude oil

Total imports were down 4.3% in June to $50.2 billion, the lowest level since November 2018. Decreases were observed in 9 of 11 sections, while modest increases were observed in the other 2 sections. In real (or volume) terms, imports decreased 3.6%. Year over year, total nominal imports were down 2.7% in June, the first annual decrease since September 2017.

Chart 4  Chart 4: Product contribution to monthly import movement
Product contribution to monthly import movement

Imports of aircraft and other transportation equipment and parts fell 25.8% to $1.7 billion in June. Since January 2019, these imports have shown high volatility, averaging an absolute monthly change of 23.4% compared with 8.5% over the first six months of 2018. Aircraft imports contributed the most to the decrease, down 54.9% in June, mainly on lower imports of airliners from the United States.

Imports of energy products, down 14.8% to $2.7 billion, also contributed to the overall decline in June. Crude oil imports (-27.9%) were largely responsible for the decrease, mainly on lower shipments coming from the United States and Saudi Arabia.

Trade surplus with the United States remains high in June

Following a $5.9 billion surplus in May, the highest since 2008, Canada's trade surplus with the United States narrowed slightly to $5.7 billion in June. Exports to the United States were down 3.9%, mainly on lower exports of crude oil, while imports decreased 3.8%. When the average exchange rates of May and June are compared, the Canadian dollar gained 1.0 US cent relative to the American dollar.

Exports to countries other than the United States fell 8.4% to $12.7 billion in June. Lower exports to Hong Kong (gold) and Saudi Arabia (other transportation equipment) were partially offset by higher exports to the United Kingdom (gold).

Imports from countries other than the United States were down 5.2% to $18.2 billion. Lower imports from Germany (cars), Saudi Arabia (crude oil) and Mexico (various products) contributed the most to the widespread decrease. As a result, Canada's trade deficit with countries other than the United States widened from $5.3 billion in May to $5.5 billion in June.

Chart 5  Chart 5: International merchandise trade balance
International merchandise trade balance

Surge in exports in the second quarter

Exports rose 5.1% in the second quarter to reach $154.0 billion. Widespread increases throughout the product sections were led by energy products (+11.9%), motor vehicles and parts (+5.2%), and farm, fishing and intermediate food products (+11.6%). Imports were down 0.6% in the second quarter to $154.5 billion. A significant decrease in imports of aircraft and other transportation equipment and parts (-24.0%) was partially offset by higher imports of motor vehicles and parts (+1.4%), energy products (+3.9%), and electronic and electrical equipment and parts (+1.8%).

Chart 6  Chart 6: Quarterly merchandise imports and exports
Quarterly merchandise imports and exports

In real (or volume) terms, exports increased 4.1% in the second quarter, mainly on higher real exports of energy products and farm, fishing and intermediate food products. Import volumes edged down 0.3% in the second quarter, once again owing to lower imports of aircraft and other transportation equipment and parts.

End of compensatory tariffs

On May 20, 2019, both the Canadian and US governments lifted compensatory tariffs on steel, aluminum and other selected products, which had been in place since mid-2018. In June 2019, the first full month following the end of the tariff period, exports of steel products to the United States that had been subject to tariffs increased 15.8%, while exports of previously tariffed aluminum products rose 47.2%.

On the import front, the movements were less pronounced. Imports of previously tariffed steel products from the United States increased 3.4% in June, while aluminum (-3.9%) and other selected products (-3.8%) both posted declines despite the elimination of tariffs on these goods.

Statistics Canada is also publishing "Impact of recent tariffs on Canada's merchandise trade" today, a summary of the impact of those tariffs on exchanges of tariffed products between Canada and the United States.

Revisions to May exports and imports

Revisions reflect initial estimates being updated with or replaced by administrative and survey data as they become available, as well as amendments made for late documentation of high-value transactions. Exports in May, originally reported as $53.1 billion in the last release, were revised to $53.0 billion. May imports, originally reported as $52.3 billion in the last release, were revised to $52.4 billion in the current month's release.



  Note to readers

Merchandise trade is one component of Canada's international balance of payments (BOP), which also includes trade in services, investment income, current transfers, and capital and financial flows.

International trade data by commodity are available on both a BOP and a customs basis. International trade data by country are available on a customs basis for all countries and on a BOP basis for Canada's 27 principal trading partners (PTPs). The list of PTPs is based on their annual share of total merchandise trade—imports and exports—with Canada in 2012. BOP data are derived from customs data by making adjustments for factors such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts.

For a conceptual analysis of BOP versus customs-based data, see "Balance of Payments trade in goods at Statistics Canada: Expanding geographic detail to 27 principal trading partners."

For more information on these and other macroeconomic concepts, see the Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) and the User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G).

Data in this release are on a BOP basis and are seasonally adjusted. Unless otherwise stated, values are expressed in nominal terms, or current dollars. References to prices are based on aggregate Paasche (current-weighted) price indexes (2012=100). Volumes, or constant dollars, are calculated using the Laspeyres formula (2012=100).

For information on seasonal adjustment, see "Seasonally adjusted data – Frequently asked questions."

Revisions

In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Current-year revisions are reflected in both the customs and BOP-based data.

The previous year's customs-based data are revised with the release of the January and February reference months, and then on a quarterly basis. The previous two years of customs-based data are revised annually and revisions are released in February with the December reference month.

The previous year's BOP-based data are revised with the release of the January, February, March and April reference months. To remain consistent with the Canadian System of Macroeconomic Accounts, revisions to BOP-based data for previous years are released annually in December with the October reference month.

Factors influencing revisions include the late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates produced for the energy section with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.

For information on data revisions for crude oil and natural gas, see "Revisions to trade data for crude oil and natural gas."

Revised data are available in the appropriate tables.

Real-time data table

Real-time table 12-10-0120-01 will be updated on August 19.

Trade data by industry

Statistics Canada has recently released a new table containing monthly data for Canadian international merchandise trade by industry. Table 12-10-0136-01 will be updated every month.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X), a user guide comparing Canadian merchandise imports and exports by industry from three of Statistics Canada's programs, is also available. This guide aims to help users to select the appropriate table when using import and export data by industry.

Next release

Data on Canadian international merchandise trade for July will be released on September 4.

Products

Customs-based data are now available in the Canadian International Merchandise Trade Database (Catalogue number65F0013X).

The updated Canada and the World Statistics Hub (Catalogue number13-609-X) is now available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, Japan, Belgium, Italy, the Netherlands, Spain and many others.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Benoît Carrière (613-415-5305; benoit.carriere@canada.ca), International Accounts and Trade Division.

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