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Crude Oil and Gold Exports Drive June Trade Surplus

Canadian Economics

By: David Ristovski

  • Canada’s merchandise exports were up 5.5 per cent (month-over-month) in June. Meanwhile, imports rose by 1.9 per cent. As a result, Canada’s merchandise trade balance moved from a deficit of 1.6 billion in May to a surplus of $638 million in June.
  • Exports rose to $66.6 billion in June. They were up in 9 of 11 categories with exports of energy products (+11.7 per cent) and metal and non-metallic mineral products (+11.8 per cent) contributing most to the monthly increase. However, exports of motor vehicles and parts fell, slightly taking a bite out of the overall gains in June. In volume terms, total exports were up 3.8 per cent.
  • Imports increased to $66.0 billion in June—equaling the all-time high seen in June 2022. Imports of motor vehicles and parts rose 5.1 per cent and contributed most to the increase in total imports. Further, imports of consumer goods were up 3.7 per cent while imports of metal ores and non-metallic mineral products (-17.1 per cent) partially offset the monthly gains. Overall, increases were observed in 9 of 11 product sections. In volume terms, imports rose by 1.3 per cent.
  • Canadian exports to the U.S. were up 2.6 per cent. Meanwhile, imports from the United States rose by 1.7 per cent. As a result, the merchandise trade surplus with the United States widened from $8.8 billion in May to $9.4 billion in June.

Key Insights

Exports of energy products and metal and non-metallic mineral products posted sharper increases than all other product categories. Specifically, exports of crude oil, which rose 13.3 per cent in June, contributed most to the monthly increase in energy product exports. Higher export volumes of crude oil to Asian countries drove this monthly result—which coincides with the recent completion of the Trans Mountain pipeline expansion. Meanwhile, exports of unwrought gold, silver and platinum group metals and their alloys were up 35.3 per cent, driven by higher demand for gold, and contributed most to the overall increase in exports of metal and non-metallic mineral products.

On the import side, increases in motor vehicles and parts were central to the monthly gain. Imports of passenger cars and light trucks were up 8.2 per cent to reach a record $6.8 billion in June, rising for the fourth time in five months, despite there being disruptions and delayed deliveries in the U.S. towards the end of 2023 into early 2024.

Exports are expected to outpace imports this year. Although that dynamic will come behind both moderate export and import activity. Export growth will be contained by cooler growth in the U.S. economy, with the underlying weakness in exports felt mostly in non-energy exports. Meanwhile, import growth will lag that of exports. In late 2024, U.S. election outcomes could negatively impact trade prospects, as both major parties support increased protectionism against Canada.

For a more detailed analysis of our trade outlook, check out our latest Canadian Five-Year Outlook.

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