(Ottawa) Canada’s merchandise trade balance went from a surplus last November to a deficit the following month, in part because of the appreciation of the Canadian dollar against the American currency.
Statistics Canada reports that in December, Canada’s merchandise exports decreased by 1.9%, while imports increased by 0.2%. The trade balance, which showed a surplus of 1.1 billion in November, gave way to a deficit of 312 million in December.
In December, the average value of the Canadian dollar increased by 1.5 US cents compared to the average value recorded in November. This largest monthly increase since May 2021 therefore had an influence on the trade balance, because a significant part of import and export transactions are carried out in US dollars and must be converted into Canadian dollars to compile monthly statistics on the trade.
According to Statistics Canada, exports of motor vehicles and vehicle parts decreased by 8.2% in December. Exports of energy products fell by 3.1%.
On the other hand, total imports increased slightly despite declines in eight of eleven product sections.
Imports of consumer goods increased by 9.4% in December; this was the highest monthly growth ever recorded for this product section. Imports of pharmaceutical products alone increased by 28.1% and thus contributed the most to the increase observed in December.
Exports to the United States, Canada’s main trading partner, fell 3.4% in December, while imports from that country increased 0.7%. As a result, the merchandise trade surplus with the United States narrowed from $11.2 billion in November to $9.2 billion in December.
Meanwhile, Canada’s merchandise trade deficit with countries other than the United States narrowed from $10.1 billion to $9.5 billion.