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Canadian international merchandise trade, October 2017

Released: 2017-12-05

Canada's merchandise trade deficit with the world totalled $1.5 billion in October, narrowing from a $3.4 billion deficit in September. Exports were up 2.7% on higher exports to the United States, while imports decreased 1.6% on lower imports of motor vehicles and parts.

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

Widespread increases in exports

Total exports increased 2.7% to $44.5 billion in October, following four consecutive monthly declines. Prices were up 1.5% and volumes increased 1.2%. Advances were observed in 9 of 11 sections, led by basic and industrial chemical, plastic and rubber products (+12.4%). There were also notable gains in metal and non-metallic mineral products (+4.5%); farm, fishing and intermediate food products (+7.7%); and energy products (+2.7%). Year over year, total exports were up 0.8%.

The increases within the basic and industrial chemical, plastic and rubber products, as well as the energy products sections were driven by similar factors in October. Exports of lubricants and other petroleum refinery products (gasoline blending stock), up 44.5%, and refined petroleum energy products (diesel and fuel oils), up 18.4%, rose for a second consecutive month, mostly on higher US demand. A recent drawdown in inventories of refined petroleum products in the United States (especially on the East Coast) led to increased exports from Canadian refineries.

Exports of farm, fishing and intermediate food products also increased in October, rising 7.7% to $2.8 billion, mostly on higher volumes. Higher exports of canola seed and canola oil were responsible for the increase, partly on higher Chinese demand for Canadian canola. There were also increased exports of canola seed to Mexico, the United Arab Emirates, Pakistan and Japan.

Decrease in imports driven by motor vehicles and parts

Total imports were down 1.6% to $45.9 billion in October, mainly due to a decrease in motor vehicles and parts. Other notable movements included metal ores and non-metallic minerals (-20.1%) and aircraft and other transportation equipment and parts (+16.2%). Overall, import volumes decreased 3.9% while prices rose 2.4%. Year over year, total imports rose 0.9%.

Imports of motor vehicles and parts fell 8.1% to $8.7 billion in October, on lower imports of passenger cars and light trucks as well as motor vehicle engines and motor vehicle parts. Passenger cars and light trucks were down 8.8% in October, returning to June levels after three consecutive monthly increases. Also contributing to the decrease were lower imports of motor vehicle engines and motor vehicle parts, down 11.1%. Work stoppages and planned shutdowns in the automotive industry led to a sharp decrease in the demand for automotive components in October.

Also decreasing in October were imports of metal ores and non-metallic minerals, down 20.1% to $983 million. Other metal ores and concentrates (-21.8%) contributed the most to the decline. After peaking in September, imports of zinc ores from Alaska decreased in October.

Partially offsetting the decreases were higher imports of aircraft and other transportation equipment and parts, up 16.2% to $1.8 billion. Imports of aircraft (+$291 million) led the increase, with new airliners from the United States contributing the most to the gain.

Higher exports to the United States

Exports to the United States rose 4.1% to $33.3 billion in October, led by unwrought gold. Imports from the United States were down 0.6% to $29.8 billion, partly on lower imports of zinc ores. As a result, Canada's trade surplus with the United States widened from $2.0 billion in September to $3.5 billion in October. The Canadian dollar lost 2.1 US cents on average relative to the US dollar from September to October.

Imports from countries other than the United States fell 3.3% to $16.1 billion, on lower imports from Mexico (light trucks), Japan (gold bullion) and Saudi Arabia (crude oil).

Exports to countries other than the United States were down 1.4% to $11.1 billion on lower exports to the United Kingdom and China (both unwrought gold). Partially offsetting these declines were higher exports to the Netherlands (metallurgical coal) and Switzerland (aircraft).

As a result, Canada's trade deficit with countries other than the United States narrowed from $5.4 billion in September to $5.0 billion in October.

Sharp drop in real imports

In real (or volume) terms, imports decreased 3.9% in October, the largest decline since October 2016, with more than half of the decrease coming from motor vehicle and parts. Real exports rose 1.2% on widespread increases. Consequently, Canada's trade balance in real terms went from a $2.0 billion deficit in September to $131 million surplus in October.

Chart 2  Chart 2: International merchandise trade balance
International merchandise trade balance

Revisions to September exports and imports

Revisions reflected initial estimates being updated with or replaced by administrative and survey data as they became available, as well as amendments made for late documentation of high-value transactions. Exports in September, originally reported as $43.6 billion in last month's release, were revised to $43.3 billion in the current month's release. September imports, originally reported as $46.7 billion in last month's release, were essentially unchanged in the current's month release.

Telling Canada's story in numbers; #ByTheNumbers

In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.

Impact of the 2008-2009 global financial crisis

In spite of the onset of the global financial crisis late in the year, Canada's total international merchandise trade reached $917 billion in 2008, before falling to $725 billion the following year. It was not until four years later that total trade surpassed the 2008 mark, reaching $948 billion in 2013.

As for the Canadian merchandise trade balance, after reporting a $49 billion surplus in 2008, Canada posted its first annual deficit since 1975 in 2009. Since then, Canada recorded annual surpluses just twice, in 2011 and 2014.

From 2008 to 2009, Canada's exports fell 26%, mostly on lower energy products, metal and non-metallic mineral products as well as motor vehicles and parts. Weak demand in the United States, which was heavily affected by the crisis, drove the decrease in exports. Exports of energy products were down due to lower crude oil prices, which were reduced by one-third from 2008 to 2009. Exports increased in each of the five years following the 2009 downturn, only surpassing 2008 levels in 2014, aided in part by the strength of commodity prices during those years.

Meanwhile, imports declined 16% from 2008 to 2009. Energy products and motor vehicles and parts accounted for most of the decrease. These drops reflected falling crude oil prices as well as a weakened auto industry. Unlike exports, imports exceeded their pre-recession levels two years following the downturn, reaching $447 billion in 2011.



  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 User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G).

Data in this release are on a BOP basis, seasonally adjusted and in current dollars. Constant dollars are calculated using the Laspeyres volume formula (2007=100).

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 data are revised with the release of the January and February reference months, and then 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 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.

For information on data revisions for crude oil and natural gas, see "Revisions to trade data for crude oil and natural gas."

Revised data are available in the appropriate CANSIM tables.

New CANSIM tables

Statistics Canada will be releasing a new CANSIM table featuring a measure of Canada's domestic export diversification on December 11. CANSIM table 228-0082 will include annual data dating back to 1988 on export diversification by product, market of destination and province of production.

Also on December 11, Statistics Canada will be releasing a new CANSIM table featuring Canada's international merchandise imports and exports classified by broad economic categories (BEC). CANSIM table 228-0081 will include, in addition to basic BEC, annual data of Canadian merchandise imports and exports for intermediate goods, consumption goods and capital goods.

Real-time CANSIM tables

Real-time CANSIM table 228-8059 will be updated on December 18. For more information, consult the document Real-time CANSIM tables.

Next release

Data on Canadian international merchandise trade for November will be released on January 5, 2018.

Products

Customs based data are now available in the Canadian International Merchandise Trade Database (Catalogue number65F0013X).

The updated Canada and the World Statistics Hub – United Sates (Catalogue number13-609-X) is now available from the home page of our website. This new product illustrates the nature and the extent of Canada's economic and financial relationship with the United States using interactive graphs and tables. This product provides an easy access to information on trade, investment, employment and travel, including merchandise trade by Canadian provinces and US states.

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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