According to Statistics Canada, Canada's merchandise imports rose 3.0 percent in May, while exports decreased 3.8 percent. With imports and exports posting strong variations in opposite directions, Canada's merchandise trade balance went from a $894 million surplus in April to a $3.4 billion deficit in May, the largest deficit since October 2020. In proportion of total trade, comparable changes in the trade balance have been observed in the past.
Total exports fell 3.8 percent in May, with 7 of the 11 product sections posting decreases. Exports of energy products and farm, fishing and intermediate food products were responsible for more than two-thirds of the retreat. In real (or volume) terms, exports decreased 2.5 percent in May.
Imports of metal and non-metallic mineral products rose 12.3 percent in May, in large part because of higher imports of unwrought gold, silver, and platinum group metals and their alloys (+42.8 percent). While movements in imports of this product category are usually driven by unwrought gold, unwrought silver made up the bulk of the increase in May, largely on shipments from the United Kingdom. Like gold, demand for silver tends to increase in times of economic uncertainty.
Exports to the United States decreased 2.9 percent in May, in part because of lower exports of crude oil. Imports from that country were up 1.3 percent, mainly on higher imports of motor vehicle engines and parts as well as aircraft. As a result, Canada's merchandise trade surplus with the United States narrowed from $8.7 billion in April to $6.7 billion in May, the lowest surplus since May 2021.
Exports to countries other than the United States decreased 6.6 percent in May 2023. Lower exports to Saudi Arabia (other transportation equipment), the United Kingdom (gold) and Brazil (various products) were partially offset by higher exports to China (articles of precious metals and iron ores).
Imports from countries other than the United States rose 6.0 percent in May, with higher imports coming from the United Kingdom (silver), Saudi Arabia (crude oil) and China (passenger cars and light trucks and cellphones).
Canada's merchandise trade deficit with countries other than the United States widened from $7.8 billion in April to $10.2 billion in May.