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Canadian international merchandise trade, June 2020

Released: 2020-08-05

In June, Canadian merchandise imports and exports rebounded sharply, mostly on the strength of motor vehicles and parts. Imports rose 21.8% and exports were up 17.1%. However, compared with February 2020, the month before the pandemic's economic impact was felt in Canada, imports were down 14.3% and exports decreased 17.9%.

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

Canada's merchandise trade deficit with the world widened from $1.3 billion in May to $3.2 billion in June.

In real (or volume) terms, imports were up 28.3% in June, while real exports increased 10.6%. Import prices were down 5.1%, while export prices rose 5.9%.

To explore the most recent results from Canada's international merchandise trade in an interactive format, visit the new "International merchandise trade monthly interactive dashboard."

Motor vehicles and parts lead the widespread increase in imports

In June, total imports rose 21.8% to $42.9 billion. By comparison, total imports in February 2020 were $50.1 billion. After a sharp decline in April (-24.5%), imports continued their downward trend in May (-4.6%), due in part to shipping delays for imports from countries other than the United States. In June, all product sections but one increased.

Chart 2  Chart 2: Contributions to the monthly change in imports, by product, June 2020
Contributions to the monthly change in imports, by product, June 2020

After posting a low of $1.7 billion in May, imports of motor vehicles and parts totalled $5.2 billion in June. This increase represents almost half of the growth in total imports in June. Imports of passenger cars and light trucks posted the largest gain (+$1.7 billion), driven by higher imports from the United States, as well as from Germany, Mexico, and South Korea. Imports of motor vehicle engines and parts (+$1.6 billion) also contributed significantly to the June increase. June was the first full month of production at motor vehicle assembly plants in North America since February. Despite a full month of activity in June, the production capacity of these plants remained below pre-pandemic levels.

Chart 3  Chart 3: Exports and imports of passenger cars and light trucks, and motor vehicle engines and parts
Exports and imports of passenger cars and light trucks, and motor vehicle engines and parts

Imports of aircraft and other transportation equipment and parts nearly doubled to $2.1 billion in June. Imports of parts for other transportation equipment reached a record high of $738 million, led by higher imports of parts for other transportation equipment from Belgium. Some of these imports were expected in May, but were delayed due to the pandemic. Aircraft imports (+$452 million) were also up in June, led by the delivery of a high-value airliner.

Motor vehicles and parts account for more than two-thirds of export growth

After posting a 5.6% gain in May, exports rose 17.1% to $39.7 billion in June. Despite these two consecutive monthly increases, export levels remained well below the pre-pandemic level of $48.4 billion (February reference month).

Chart 4  Chart 4: Contributions to the monthly change in exports, by product, June 2020
Contributions to the monthly change in exports, by product, June 2020

As with imports, motor vehicles and parts contributed the most to the overall increase in exports. This product section rose from $1.9 billion in May to $6.1 billion in June, led by increased exports to the United States. Excluding motor vehicles and parts, total exports increased 5.1%. Exports of passenger cars and light trucks (+$2.9 billion) drove the rebound, which coincided with the resumption of activities in the automotive assembly industry in Canada in mid-May, with production continuing for the entire month of June. Exports of engines and parts (+$976 million) also posted a significant gain in June.

Exports of metal and non-metallic mineral products rose 17.4% in June. Exports of unwrought gold, silver, and platinum group metals (+23.2%), which is mostly comprised of refined gold, led the increase in this product section, with higher gold exports to the United Kingdom. On a year-over-year basis, this product group has increased almost 80%, driven by a significant increase in both volumes and prices.

Chart 5  Chart 5: Canadian exports of unwrought gold, silver, and platinum group metals, and their alloys
Canadian exports of unwrought gold, silver, and platinum group metals, and their alloys

Trade with the United States rebounds

Imports from the United States increased 28.0% to $26.4 billion in June, partly on imports of motor vehicles and parts. However, imports from the United States were down 19.3% compared with February.

Chart 6  Chart 6: Canada's imports and exports from the United States and non-US countries
Canada's imports and exports from the United States and non-US countries

Exports to the United States rose 21.8% to $27.5 billion in June, mainly on exports of motor vehicles and parts. However, exports to the United States were down 23.9% from February. As a result, Canada's trade surplus with the United States narrowed from $1.9 billion in May to $1.1 billion in June.

When the average exchange rates of May and June are compared, the Canadian dollar gained 2.2 cents US relative to the American dollar.

Following a 13.0% decrease in May, imports from countries other than the United States rose 13.0% to $16.5 billion in June. Imports from Mexico (motor vehicles and parts), Belgium (parts for other transportation equipment) and Germany (passenger cars and light trucks) contributed the most to the increase. The import levels from countries other than the United States were 5.0% lower in June than in February.

Exports to countries other than the United States were up 7.8% to $12.2 billion, led by higher exports to the United Kingdom (refined gold). Export levels to countries other than the United States in June were similar to levels in February, but that month's total was below the 2019 average.

As a result, Canada's trade deficit with countries other than the United States widened from $3.3 billion in May to $4.3 billion in June.

Chart 7  Chart 7: International merchandise trade balance
International merchandise trade balance

Large quarterly decreases for exports and imports

On a quarterly basis, exports decreased from $140.4 billion in the first quarter of 2020 to $105.7 billion in the second quarter, a 24.7% decline. The value in the second quarter was the lowest observed since the last quarter of 2010. Exports of energy products (-56.0%) and motor vehicles and parts (-56.2%) showed the sharpest declines, while exports of farm, fishing and intermediate food products (+12.8%) and metal ores and non-metallic minerals (+1.7%) posted gains despite the pandemic.

Imports fell 22.7% to $115.1 billion in the second quarter, the lowest level since the third quarter of 2011. The largest quarterly decline was observed in imports of motor vehicles and parts (-66.9%). With the exception of the metal ores and non-metallic minerals section, all product sections posted declines.

As a result, Canada's quarterly trade deficit widened from $8.4 billion in the first quarter to $9.4 billion in the second quarter.

Using the Fisher formula, exports in constant dollars decreased 17.8% in the second quarter, with exports of motor vehicles and parts posting the sharpest decline. Imports in constant dollars decreased 20.3% in the second quarter, again mostly due to lower imports of motor vehicles and parts.

Revisions to May merchandise exports and imports

Imports in May, originally reported as $35.3 billion in the previous release, were revised to $35.2 billion in the current month's release. Exports in May, originally reported as $34.6 billion in the previous release, were revised to $33.9 billion, mainly on revisions to crude oil exports.

Substantial revisions were made this month to crude oil exports for the months of 2020. This is the result of a recent change in methodology used to calculate crude oil exports on a balance-of-payments basis.

Trade in medical and protective goods

The article "Trade in medical and protective goods, June 2020" was released today. This article describes trade in personal protective equipment with a particular focus on monthly variations in imports and exports in June 2020.

Monthly trade in services

Monthly service exports were up 4.1% to $8.1 billion in June, while service imports rose 17.0% to $8.8 billion.

Combining international trade in goods and services, exports increased 14.7% to $47.8 billion in June, while imports rose 20.9% to $51.7 billion. As a result, Canada's trade deficit with the world for goods and services combined was $3.9 billion in June.




  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). Movements within aggregate Paasche prices can be influenced by changes in the share of values traded for specific goods, with sudden shifts in trading patterns—as observed presently with the pandemic—sometimes resulting in large movements in Paasche price indexes. Volumes, or constant dollars, are calculated, using the Laspeyres formula (2012=100) unless otherwise stated.

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 thereafter 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 data for 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.

Revised data are available in the appropriate tables.

Real-time data table

Real-time table 12-10-0120-01 will be updated on August 17.

Next release

Data on Canadian international merchandise trade for July will be released on September 3.

Products

The product International merchandise trade monthly interactive dashboard (Catalogue number71-607-X) is now available. This new interactive dashboard is a comprehensive analytical tool that presents monthly changes in Canada's international merchandise trade data on a balance of payments basis, fully supporting the information presented every month in the Daily text.

The product The International Trade Explorer (Catalogue number71-607-X) is available online and was updated with 2019 annual data revisions.

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, and Spain.

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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