A shipping container is unloaded in the Port of Montreal, on May 17, 2021.CHRISTINNE MUSCHI/Reuters
Canada recorded a surprise trade surplus of $638-million in June, data showed on Tuesday, mainly led by a jump in shipments of crude oil from the recently expanded Trans Mountain Pipeline.
A surge in exports of gold also boosted exports and, together with energy products shipments, helped exports overtake imports for the first time in four months, Statistics Canada said.
Analysts polled by Reuters had forecast a $1.84-billion trade deficit. May’s trade deficit was revised down to $1.61-billion from a preliminary $1.93-billion deficit.
Total exports jumped 5.5 per cent in June, led by crude oil and gold exports, while imports were up 1.9 per cent, driven by cars and light trucks, data showed. By volume, exports rose 3.8 per cent in June, while imports increased by 1.3 per cent.
After 12 years and $34-billion in costs, Canada in May commissioned the Trans Mountain Pipeline expansion project (TMX), which unlocked the Asia-Pacific market for local crude oil producers.
“They are shipping more through the Trans Mountain pipeline into Asia-Pacific, which is really positive,” said Prince Owusu, senior economist with Export Development Canada.
Exports of energy products, which account for over a fifth of all exports from Canada, rose 11.7 per cent. While this was aided by higher prices, Statscan said the increased volume of crude exports was the biggest contributor to the overall increase.
Exports of metal and non-metallic products, which contribute over a 10th of total exports, rose 11.8 per cent, led largely by exports of unwrought gold.
The Bank of Canada lowered its benchmark interest rate for a second straight month in July and indicated its focus was shifting to boosting the economy.
Financial markets have fully priced in a 25-basis-point cut in the central bank’s key policy rate at its September meeting and expect similar cuts at its October and December meetings.
The Canadian dollar pared losses after the data, trading marginally down 0.04 per cent at 1.3829 to the U.S. dollar, or 72.26 U.S. cents.
The rise in total imports was led by motor vehicles and parts as well as consumer goods.
An 8.2 per cent rise to a record $6.8-billion in imports of passenger cars and light trucks drove the motor vehicles and parts category in June.
Exports to the United States, by far Canada’s largest trading partner, rose for a third consecutive month and outpaced the growth in imports in June, leading to Canada’s trade surplus with its neighbour widening to the highest level since November 2023.