Canada unexpectedly posts largest trade deficit since 2020
Data suggest exports may no longer be bright spot in the economy
Canada’s merchandise trade balance unexpectedly recorded its largest deficit since October 2020, in large part due to lower energy prices.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Don't have an account? Create Account
tap here to see other videos from our team.
Canada unexpectedly posts largest trade deficit since 2020 Back to video
tap here to see other videos from our team.
The country posted a $3.4 billion trade deficit in May, from a downwardly revised $894 million surplus a month earlier, with exports of crude oil and wheat decreasing the most, Statistics Canada reported Thursday in Ottawa. It’s the second deficit so far this year. Economists were anticipating exports to exceed imports by $1.2 billion in May.
Total exports decreased 3.8 per cent that month, while imports rose 3 per cent after three consecutive monthly declines. Stripping away the impact of prices, Canada exports fell 2.5 per cent, while imports climbed 3.5 per cent.
Data suggest exports, which spurred output growth in the first three months of this year along with household spending, may no longer be one bright spot in the economy in the second quarter. July’s ongoing dockworker strike in British Columbia is also expected weigh on shipments at the start of the third quarter.
Consumer consumption, on the other hand, appears to be holding strong. Imports of motor vehicles and parts jumped 4.5 per cent in May, reaching a record-high $11.3 billion. Higher imports and sales of passenger cars and light trucks suggest Canadians are still spending on major purchases despite the Bank of Canada’s aggressive tightening campaign.
In the first five months of 2023, imports of motor vehicles and parts were up 22.4 per cent compared with the same period in 2022.
The stronger-than-expected economic momentum earlier this year prompted a rate hike last month, with economists now expecting another increase to borrowing costs either in July or September.
Bloomberg.com
