Canada’s Trade Stumbles as Weak Exports Deepen Deficit

Ottawa, July 4, 2024 – Canada’s trade growth is showing signs of slowing down. May saw exports fall to their lowest level in nearly a year, contributing to a widening trade deficit of $1.92 billion Canadian dollars (CA$1.31 billion euros).

Sluggish Export Performance

The primary driver behind Canada’s worsening trade balance was a 2.6% decline in exports to CA$62.45 billion. Gold, energy, and aircraft exports experienced the most significant drops, partially offset by a rise in car and component exports. This represents the sharpest decline in exports since 1997 (excluding the US).

Subdued Imports

Canadian imports in May dipped at a slower pace of 1.6% to CA$64.37 billion. Weaker demand for cars and components from the US, Canada’s key trading partner, influenced the lower import figures.

Heavy Reliance on the US

Canada’s trade is heavily reliant on the US, which accounts for over 75% of its total exports. The recent sluggish performance of the US economy directly impacts Canadian trade activity.

Looking Ahead

The growth rate of Canadian trade is expected to moderate slightly in the coming months. Weak exports of gold, energy, and aircraft will likely continue to put pressure on Canada’s trade balance.

Additional Information

• Falling global prices for gold and energy impacted Canadian exports of these commodities.
• Disrupted supply chains and geopolitical instability also influenced Canada’s trade performance.
• The Canadian government is implementing various measures to support domestic economic growth and strengthen the trade balance.

Conclusion

Canada’s trade faces challenges due to weak exports and dependence on the US economy. The trade growth rate is expected to slow down in the coming months, but government initiatives may help stabilize Canada’s trade balance.

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Sources: Statistics Canada