In June, Canada’s merchandise exports decreased 2.2%, while imports were down 0.5%. As a result, Canada’s merchandise trade deficit with the world widened from $2.7 billion in May to $3.7 billion in June, says a report released Tuesday by Statistics Canada.
Tom Fisk
“A port strike that significantly affected activity at British Columbia marine terminals began on July 1 and disrupted regular operations for more than 13 days. Canada’s international merchandise trade, especially with Asian countries, relies heavily on these ports to move goods. As a result of the strike, impacts on Canadian merchandise trade activity are anticipated for the reference month of July, in particular for containerized shipments. Statistics for the July reference month will be published on September 6,” said the federal agency.
“In 2022, 9.2% of Canada’s total exports by value were shipped through British Columbia via marine transportation. For imports, 5.0% of the total value was cleared by B.C. marine ports in 2022. Over half of exports through B.C. ports were resource-based goods, ranging from mined commodities such as coal and potash to agricultural and forestry products, including wheat, canola and pulp and paper. Many of these goods are shipped in bulk, and are expected to be less impacted by strike activity in July. Imported goods arriving through B.C. ports included many finished consumer products as well as intermediate goods used in various industries.
“International trade statistics do not include in-transit shipments, which reflect shipments between two countries that rely in part on a third country’s transportation infrastructure—for instance, cargo from overseas that is off-loaded at a B.C. port and then transported directly to the US by road or rail. As is consistent with international standards, in-transit shipments are excluded from Canadian International Merchandise Trade statistics. Among other factors, this may give rise to differences between the official trade data and the dollar value estimates of trade being reported in other media outlets and port operation authorities.”
Following a 3.0% decrease in May, total exports were down 2.2% in June, with 9 of the 11 product sections posting declines. Total exports in real (or volume) terms fell 1.1% in June. As for export prices, they declined for the 11th time in the past 12 months. From June 2022 to June 2023, total export prices decreased 14.2%. However, during the same period, the value of total exports declined 12.3%, meaning that exports in real terms in fact increased, said StatsCan.
After rising 3.0% in May, total imports decreased 0.5% in June. While 7 of the 11 product sections posted declines, these were largely offset by the increase in imports of unwrought gold. In real (or volume) terms, imports were up 0.9%, added the report.
Marc Ercolao, Economist with TD Economics, said June’s trade data provided further input for how net exports are shaping up in the second quarter of the year.
“Recall that in the first quarter, export volumes held up impressively well, up 10% quarter-on-quarter (q/q) annualized, while imports remained effectively flat. That trend appeared to be erased in the second quarter as real export volumes (-0.4% q/q) were outpaced by real imports (+0.9% q/q).This suggests that trade activity could be a net drag on second quarter GDP, due for release at the end of this month,” he said
“Looking into next month, the B.C. port strike and the floods in Nova Scotia will likely impact July’s trade figures. These effects will be offset in the proceeding months. So far, the data suggest that domestic activity (proxied by imports) is holding up well, as the deficit with our major international trading partners (ex. US) has reached an all time.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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