Canada recorded a surprising trade surplus of C$638 million ($461 million) in June, defying economists’ predictions of a fourth consecutive monthly deficit. This surge stemmed from increased energy and gold exports, reflecting global demand and the benefits of expanded infrastructure.
Economists surveyed by Bloomberg had anticipated a median deficit of C$2.04 billion, highlighting the unexpected nature of this surplus. Statistics Canada noted that the surplus size fell within typical bounds for monthly revisions, with the previous month’s trade balance also revised upward by about C$320 million.
Exports jumped 5.5% in June, outpacing a 1.9% rise in imports. The surge in exports can be largely attributed to the Trans Mountain pipeline expansion, which began commercial operations in May. This project, heavily funded by Prime Minister Justin Trudeau’s government, nearly tripled the pipeline’s capacity, facilitating greater crude oil exports from Alberta’s oil sands to ports near Vancouver.
Energy product exports surged 11.7% in June, led by crude oil exports. While crude oil prices saw an increase, the volume of exports was the primary contributor, particularly with higher shipments to Asian markets.
“Despite robust export activity in June, trade will likely act as a headwind to second-quarter gross domestic product growth, as April and May data came in on the weaker end,” Marc Ercolao, an economist at Toronto-Dominion Bank, noted in a report to investors. He added that the continued impact of the Trans Mountain pipeline expansion suggests strong crude oil exports in the coming months.
Gold exports also played a crucial role in the trade surplus, with metals and non-metallic mineral deliveries rising by 11.8% in June after a 7.3% decline in May. Statistics Canada reported significant monthly fluctuations in export values of unwrought gold in the year’s first half, influenced by geopolitical turmoil. Notably, June saw a substantial increase in gold exports to the UK.
The rise in imports, reflecting resilient consumer demand, was driven by passenger vehicles and consumer goods. Imports of passenger cars and light trucks hit a record C$6.8 billion in June, an 8.2% increase, marking the fourth rise in five months. This growth followed a recovery from production disruptions and delayed deliveries in the United States in late 2023 and early 2024.
In volume terms, Canada’s exports rose by 3.8% in June, while imports increased by 1.3%. The country’s trade surplus with the US also widened for the third consecutive month, reaching C$9.4 billion from C$8.8 billion.
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