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Canadian international merchandise trade, December 2020

Released: 2021-02-05

In December, Canada's merchandise exports rose 1.5%, with energy product exports posting the largest increase. Imports fell 2.3%, mainly because of lower imports of consumer goods. As a result, Canada's merchandise trade deficit with the world narrowed from $3.6 billion in November to $1.7 billion in December, the lowest deficit since June 2020.

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

For the year 2020, Canada's trade deficit totalled $36.2 billion, more than double the deficit observed in 2019. Total merchandise exports fell 12.3% in 2020, while imports were down 8.6%. By comparison, during the last major economic downturn, in 2009, annual merchandise exports dropped 24.6% and imports fell 15.7%.

To explore the most recent results of Canada's international merchandise trade in an interactive format, see the International merchandise trade monthly interactive dashboard. The International Trade Explorer has also been updated to include annual data for 2020.

The exchange rate affects trade values in December

A large proportion of import and export transactions are completed in US dollars and must be converted to Canadian dollars to compile monthly trade statistics. When the Canadian dollar appreciates against the US dollar, trade values in Canadian dollars are lower in the short term.

In December, the average value of the Canadian dollar rose 1.6 cents US compared with the average value in November. This was one of the strongest increases in three years. When expressed in US dollars, Canadian exports rose 3.6% in December, and imports edged down 0.4%.

Chart 2  Chart 2: Monthly average of the Canadian dollar value in US dollars
Monthly average of the Canadian dollar value in US dollars

Energy products pull exports upward

Total exports rose 1.5% to $47.3 billion in December, with exports in 6 of the 11 product sections increasing. Non-energy exports edged up 0.1%. In real (or volume) terms, exports increased 0.5%.

Chart 3  Chart 3: Contribution to the monthly change in exports, by product, December 2020
Contribution to the monthly change in exports, by product, December 2020

In December, exports of energy products were up 10.2% to $7.5 billion. However, this value was $670 million below the level recorded before the COVID-19 pandemic in February. Exports of crude oil (+10.5%) posted the largest increase, on the strength of higher prices. Exports of crude oil totalled $5.3 billion in December—more than $1.9 billion lower than the value observed in December 2019. This year-over-year difference is mainly due to a drop in prices.

Exports of refined petroleum products (+28.8%) also increased in December, mainly on higher exports of diesel fuel to the United States. Higher prices and volumes were observed for exports of refined petroleum products in December. Overall, exports of energy products decreased 36.5% for the year 2020, an annual decline similar to the one observed in 2009.

Chart 4  Chart 4: Canadian exports of energy products
Canadian exports of energy products

Consumer goods drive imports down

Total imports fell 2.3% to $49.0 billion in December, the second consecutive monthly decline and the largest decrease since May. In real (or volume) terms, imports were down 1.5%.

Chart 5  Chart 5: Contribution to the monthly change in imports, by product, December 2020
Contribution to the monthly change in imports, by product, December 2020

Imports of consumer goods fell 8.0% in December. After posting low levels in the first four months of 2020, consumer goods imports rose for seven consecutive months and posted record highs in the last four of these months. These imports were buoyed by factors such as the steady increase in imports of COVID-19 personal protective equipment. Imports of other products such as clothing, appliances, furniture and pharmaceutical products also contributed to the growth during this period. For the year 2020, imports of consumer goods rose 1.1%.

In December, imports of clothing, footwear and textile products fell 21.5%, contributing the most to the monthly decline in imports of consumer goods. Because of the pandemic, imports of clothing, footwear and textile products behaved differently in 2020 compared with previous years, leading to large monthly fluctuations in seasonally adjusted data. This affected the December results as well. There were similar effects on imports of pharmaceutical products, which fell 14.7% after reaching a record high in November. Lastly, imports of miscellaneous goods and supplies (-8.6%) also declined in December, following recent increases that were due in large part to higher imports of personal protective equipment.

Chart 6  Chart 6: Canadian imports of consumer goods
Canadian imports of consumer goods

Trade deficit with countries other than the United States narrows

In December, exports to countries other than the United States rose 1.6% to $13.9 billion, the seventh increase in eight months. Higher exports to China (iron ore and miscellaneous products) and Switzerland (refined gold and aircraft) were partially offset by lower exports to the United Kingdom (refined gold).

Imports from countries other than the United States fell 5.9%. This was the second consecutive monthly decline after five gains from June to October. Imports from Switzerland (pharmaceutical products) and China (cellphones) posted the largest declines.

Chart 7  Chart 7: Canada's imports and exports with the United States and countries other than the United States
Canada's imports and exports with the United States and countries other than the United States

Canada's trade deficit with countries other than the United States narrowed from $5.8 billion in November to $4.4 billion in December.

In December, exports to the United States increased 1.5%, mainly on higher exports of energy products, while imports from the United States edged down 0.1%. As a result, Canada's trade surplus with the United States widened from $2.2 billion in November to $2.8 billion in December.

For the year 2020, exports to the United States dropped 15.6% compared with the previous year, while imports from the United States fell 11.0%. As for trade with countries other than the United States, exports fell 2.6% and imports were down 4.4%. The difference in the annual results for trade with the United States and with other countries is primarily because the two product sections hardest hit by the pandemic in 2020—motor vehicles and motor vehicle parts, as well as energy products—are mainly traded with the United States.

Chart 8  Chart 8: International merchandise trade balance
International merchandise trade balance

Trade increases in the last quarter of 2020

On a quarterly basis, exports rose 2.7% to $140.5 billion in the fourth quarter, a 4.6% decline compared with the same quarter in 2019. Exports of metal and non-metallic mineral products (+14.4%) and energy products (+9.9%) were responsible for the increase in the last quarter of 2020.

Compared with the previous quarter, imports advanced 2.2% to $149.7 billion in the fourth quarter of 2020, a level slightly higher than that of the same quarter in 2019. Imports of consumer goods (+4.1%) contributed the most to this increase, despite the decline observed in December. Imports of motor vehicles and motor vehicle parts, and of industrial machinery, equipment and parts, also posted notable gains in the last quarter of 2020.

Using the Fisher formula, exports in constant dollars increased 1.2% in the fourth quarter, while imports in constant dollars rose 2.4%.

Revisions to November merchandise export and import data

Imports in November, originally reported as $50.1 billion in the previous release, were revised to $50.2 billion in the release for the current reference month. Exports in November, originally reported at $46.8 billion in the previous release, were revised to $46.6 billion in the release for the current reference month.

Trade in medical and protective goods and vaccines

Imports of medical and protective goods decreased 17.4% in December to $2.7 billion on a customs basis, the lowest value since April 2020. In December, there were lower imports of personal protective equipment (-14.3%), medical equipment and products (-23.5%), and diagnostic products (-16.1%). These declines were slightly offset by higher imports of disinfectant and sterilization products (+0.6%). Despite the overall decrease, imports of medical and protective goods were up 27.2% year over year. Meanwhile, exports of medical and protective goods declined 2.0% to $1.3 billion in December, the second consecutive monthly decrease. There were lower exports of medical equipment and products (-2.9%) and personal protective equipment (-6.3%). Year over year, exports were down 1.4%.

In December, vaccines for immunization against the virus that causes COVID-19 were first imported into Canada. Imports of these vaccines are reported under the category "vaccines for human medicine other than for influenza." Statistics for this category therefore include vaccines for a variety of other illnesses. Historically, imports in this category tend to fluctuate from month to month and usually decline in December, following increased imports in the autumn months. Imports in December 2020 were in line with typical patterns, as they declined 21.3% to $44.3 million following a sharp increase in November. There were lower imports from the United States and Ireland, which were moderated by higher imports from Spain, France and Belgium. Based on a preliminary analysis, it is estimated that Canada's imports of COVID-19 vaccines totalled approximately $16 million in December. Despite the addition of these new vaccines, total vaccine imports were down 14.6% in December compared with December 2019.

Monthly trade in services

In December, monthly service exports were down 1.9% to $9.2 billion, and service imports decreased 0.8% to $9.4 billion.

When international trade in goods and international trade in services are combined, exports increased 1.0% to $56.5 billion in December, while imports fell 2.1% to $58.4 billion. As a result, Canada's trade deficit with the world for goods and services combined was $1.8 billion in December.




  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 adjusting 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-based data 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).

The 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 currently 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-based and the BOP-based data.

The previous year's customs-based data are revised with the release of data for 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, the replacement of estimates produced for the energy section with actual figures, changes in merchandise classification based on more current information, and changes to seasonal adjustment factors.

For information on data revisions for exports of energy products, see Methodology for Exports of Energy Products within the International Merchandise Trade Program.

Revised data are available in the appropriate tables.

Real-time data table

The real-time data table 12-10-0120-01 will be updated on February 22.

Next release

Data on Canadian international merchandise trade for January will be released on March 6.

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 now available online.

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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