StatsCan reports $136M trade surplus in June, imports, exports down

OTTAWA — Canada’s trade surplus narrowed in June to $136 million, as both exports and imports dropped, largely due to trade decreases in crude oil, aircraft and other transportation equipment and parts, Statistics Canada said on Aug. 2.

June’s surplus narrowed from a revised $556 million in May, but was much higher than the $300 million trade deficit analysts had expected, according to financial services firm Refinitiv.

The positive trade balance for Canada, combined with a “sturdy” gross domestic product report of 0.2 per cent for May, suggests more upside for the Canadian economy, noted Robert Kavcic, senior economist at BMO. He projects second-quarter economic growth of three per cent.

“There’s no debate that Canadian real GDP roared back in Q2…with trade carrying softer performances for consumer spending, residential construction and business investment,” he said.

The federal agency’s international merchandise trade report said exports fell 5.1 per cent to $50.3 billion, offsetting a strong gain in May amid a 3.6 per cent drop in export prices.

Exports of crude oil dropped 8.6 per cent, the first monthly decrease this year, as crude oil export prices fell 13.5 per cent even as volumes rose 5.6 per cent. However, the data collection agency noted that crude export levels are still much higher than the lows reported in December 2018, largely due to higher prices.

Aircraft exports, meanwhile, were down 40.8 per cent, mainly on lower shipments of commercial aircraft to the United States. Exports of boats and other transportation fell by more than half in June, largely due to a decline in exports to Saudi Arabia.

Imports were down 4.3 per cent to $50.2 billion, the lowest level since November 2018, with declines also focused in the aircraft and energy sectors.

June marked the first full month following the end of U.S. tariffs on steel and aluminum that had been in place since mid-2018. Exports of steel products to the U.S. that had been subject to the tariffs increased 15.8 per cent in June, while exports of aluminum products that were previously tariffed rose 47.2 per cent, Statistics Canada said.

Statistics Canada noted that Canada’s trade surplus narrowed slightly to $5.7 billion from $5.9 billion in May, which was the highest level since 2008, as the loonie gained strength compared to the month before. A strong loonie makes Canadian goods more expensive for foreign buyers.