Canada Trade Gap Hits Record High


Canada’s merchandise trade deficit widened to CAD 4.59 billion in December 2018 from a downwardly revised CAD 1.98 billion in the previous month and compared with market expectations of a CAD 2.8 billion gap. It was the largest trade shortfall on record, as exports dropped 3.8 percent mainly due to lower sales of energy products amid falling crude oil prices and imports rose 1.6 percent driven by purchases of energy products. In 2018, the country trade gap narrowed to CAD 21.7 billion from CAD 24.6 billion in 2017.

Exports declined 3.8 percent to CAD 46.3 billion in December, the fifth consecutive monthly decrease since the record set in July, mainly due to a fall in sales of energy products (-21.4 percent to CAD 6.4 billion), the lowest level since July 2016. Crude oil exports went down 28.7 percent to CAD 3.3 billion, down by more than half since peaking in July 2018. Additionally, sales fell for metal and non-metallic mineral products (-9.8 percent to CAD4.9 billion), driven by lower exports of gold to the UK and Hong Kong. On the other hand, sales of aircraft and other transportation equipment and parts rose 16.0 percent to CAD 2.4 billion, mostly on increased exports of aircraft engines to the US. Excluding energy products, exports were essentially unchanged in December.

Exports to the US dropped 3.6 percent to CAD 33.7 billion, mainly due to lower sales of crude oil. Exports to countries other than the US decreased 4.2 percent to CAD 12.6 billion, as lower sales to the UK and Hong Kong (gold in both cases) were partially offset by higher sales to China. 

Imports went up 1.6 percent to CAD 50.9 billion, boosted by higher purchases of energy products (19.7 percent to CAD 3.3 billion) as refined petroleum energy products (+33.2 percent) 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. Also, imports rose for motor vehicles and parts (4.0 percent to CAD 9.4 billion) led by passenger cars and light trucks (+8.7 percent); and metal ores and non-metallic minerals (32.8 percent to a record high of CAD 1.4 billion) of which other metal ores and concentrates (+43.0 percent) amid higher purchases of bauxite and aluminum oxide from Brazil. Meanwhile, imports of aircraft and other transportation equipment and parts declined 24.9 percent to CAD 1.7 billion, namely aircrafts (-75.9 percent).

Imports from the US fell 2.4 percent to CAD 31.9 billion, mainly on lower pruchases of aircraft. Imports from countries other than the US advanced 9.2 percent to a record CAD 19.0 billion in December. Widespread increases were led by higher imports from Brazil, China and Russia.

In 2018, the country trade gap narrowed to CAD 21.7 billion from CAD 24.6 billion in 2017.

Canada Trade Gap Hits Record High


Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com
3/6/2019 2:11:48 PM