Trade Deficit Narrows to $1.0 Billion in April

  • Canada’s merchandise exports were up 2.6 per cent (month-over-month) in April. Meanwhile, imports rose by 1.1 per cent. The result is Canada’s merchandise trade deficit narrowed from $2.0 billion in March to $1.0 billion in April.
  • Exports rose to $64.4 billion in April. They were up in 8 of 11 categories with exports of energy products (up 2.7 per cent) contributing most to the monthly increase. Exports of metal and non-metallic mineral products bounced back slightly, rising by 4.7 per cent, after posting a sharp decline in March. In volume terms, total exports were up 1.7 per cent.
  • Imports increased to $65.5 billion in April. Imports of motor vehicles and parts rose for a third consecutive month (up 4.2 per cent) and contributed most to the monthly increase. Imports of aircraft and other transportation equipment were up 23.7 per cent in April, which made up for the 17.7 per cent decline posted in March. Overall, increases were observed in 6 of 11 product sections. In volume terms, imports edged down by 0.2 per cent.
  • Canadian exports to the U.S. were up 2.4 per cent. Meanwhile, imports from the United States increased by 1.8 per cent. As a result, the merchandise trade surplus with the United States widened from $6.9 billion in March to $7.3 billion in April.

Key Insights

Exports of energy products increased the most out of all product sections this month, as many subcategories posted strong gains. Notably, natural gas exports surged by 60.1 per cent, returning to more typical levels due to milder temperatures in the northeastern United States. Crude oil exports rebounded by 3.0 per cent, in line with a recovery in refining capacity in the US Midwest. Furthermore, natural gas exports increased, supported by higher propane exports to Japan in April.

On the import side, motor vehicles and parts, as well as aircraft and other transportation equipment and parts, contributed most to the monthly increase. Imports of passenger cars and light trucks rose by 9.2 per cent, driven by higher imports of sport utility vehicles and other light trucks from the U.S., which aligns with increased production in the U.S. Meanwhile, imports of aircraft and transportation equipment and parts grew, bolstered by higher imports of ships, including a ferry from China that will run between Newfoundland and Nova Scotia

Exports are expected to outpace imports this year. Although that dynamic will come behind both moderate export and import activity. Export growth will be weighed down by a cooling of the U.S. economy, with the underlying weakness in exports felt most acutely in non-energy exports. Meanwhile, import growth will lag behind that of exports. There are risks to the trade outlook, such as weaker global economic activity and ongoing geopolitical tensions.

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