Reduced Motor Vehicles and Parts Imports Drives the Canadian Trade Balance to a Surplus

Insights

Exports of motor vehicles and parts posted sharper declines than all other product categories. Exports of passenger cars and light trucks dropped by 5.9 per cent in July and are now sitting at 24.8 per cent below their high reached in October 2023, coinciding with a reduction in Canadian auto manufacturing production. Additionally, exports of motor vehicle engines and parts fell by 7.8 per cent, due to a production slowdown in the United States after several months of increased activity. Meanwhile, exports to countries other than the U.S. also decreased by 7.8 per cent, mainly due to lower shipments of unwrought gold to the United Kingdom and reduced crude oil exports to India and Hong Kong.

Similar to exports, declines in imports of motor vehicles and parts were central to the monthly drop. Imports of passenger cars and light trucks fell by 18.7 per cent, following a record high in June. Between January and June 2024, imports in this category surged by 26.0 per cent, as Canadian imports rebounded after delayed U.S. production that had affected passenger car and light truck imports towards the end of 2023. The recent decline signals the end of this recovery period. Additionally, imports of aircraft and other transportation equipment dropped by 17.2 per cent, driven by sharp declines in aircraft imports (-43.4 per cent) and imports of ships, locomotives, railway rolling stock, and rapid transit equipment (-60.9 per cent). This decrease was largely due to fewer ship imports from China and Norway and reduced locomotive and railway rolling stock imports from the United States.

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