The Daily — Canadian international merchandise trade, December 2023 (2024)

Released:2024-02-07

In December, Canada's merchandise exports decreased1.9%, while imports edged up0.2%. As a result, Canada's merchandise trade balance with the world went from a surplus of $1.1billion in November to a deficit of $312million in December, the first monthly trade deficit since July. The December deficit is close to the typical bounds for monthly revisions to imports and exports.

Consult the "International trade monthly interactive dashboard" to explore the most recent results of Canada's international trade in an interactive format.

The appreciation of the Canadian dollar impacts import and export values

A large proportion of import and export transactions are completed in US dollars and must be converted to Canadian dollars to compile monthly trade statistics. When the Canadian dollar appreciates against the US dollar, monthly trade values expressed in Canadian dollars are lower.

In December, the average value of the Canadian dollar increased1.5cents US compared with the average value in November. This represents the largest monthly gain since May2021. When expressed in US dollars, Canadian exports edged up0.1% in December2023, and imports rose2.3%.

Decrease in exports of passenger cars and light trucks as well as crude oil

Total exports fell1.9% in December, a second consecutive monthly decline. Decreases were observed in7of the11product sections. In real (or volume) terms, total exports fell0.4% in December.

Exports of motor vehicles and parts were down8.2% in December. Exports of passenger cars and light trucks (-11.6%) contributed the most to the decline. This decrease was due in part to a gradual slowdown in the production of certain models that will soon no longer be manufactured in Canada or that will be manufactured at other Canadian plants. In the future, new models, including electric vehicles, are expected to be introduced to Canadian manufacturing plants. Despite the decrease in December, exports of motor vehicles and parts finished2023up26.2% from2022, reaching unparalleled annual levels.

Exports of energy products fell3.1% in December. The largest contributor to this decline was crude oil exports (-4.9%), which were also down in November. Both the November and December decreases were the result of lower crude oil prices, which were pushed downward in the last few months in part because of oversupply and concerns over demand. Meanwhile, in volume terms, crude oil exports posted a fifth consecutive monthly increase. This occurred as crude oil production increased in Alberta in the fall of2023with the completion of maintenance work at upgrading facilities.

Offsetting movements in imports

Total imports edged up0.2% in December, despite declines in8of the11product sections. Imports of consumer goods posted the largest gain. Excluding this product section, imports were down2.0% in December. In real (or volume) terms, total imports rose1.3%.

Imports of consumer goods were up9.4% in December. This was the strongest monthly increase on record for this product section. Imports of pharmaceutical products rose28.1%, contributing the most to the December increase. While imports of pharmaceutical products have posted declines in the month of December in previous years, they rose in December2023because of atypical high-value imports from the United States. Other product groups, such as clothing, footwear and accessories (+11.4%), miscellaneous goods and supplies (+6.5%) and alcoholic beverages (+18.9%), also posted notable increases.

Imports of metal and non-metallic mineral products (+5.8%) also contributed to the overall increase in December. Imports of unwrought gold, silver, and platinum group metals (+15.8%) posted a second consecutive monthly gain, mainly on higher purchases of unwrought gold in the United States. Imports of basic and semi-finished products of non-ferrous metals (+27.7%) were also up in December.

The increases in the above product sections were almost entirely offset by lower imports in several other product sections, including electronic and electrical equipment and parts (-5.7%); energy products (-9.9%); aircraft and other transportation equipment and parts (-11.7%); and motor vehicles and parts (-2.1%).

Lower exports to the United States, higher exports to other countries

Exports to the United States were down3.4% in December, falling for a third consecutive month. Meanwhile, imports from the United States increased0.7%. As a result, Canada's merchandise trade surplus with the United States narrowed from $11.2billion in November to $9.2billion in December.

Exports to countries other than the United States were up3.3% in December. Gains were observed in exports to Italy (aircraft and pharmaceutical products), Hong Kong (unwrought gold), Norway (nickel) and Australia (aircraft). Imports from countries other than the United States were down0.6%, due in part to lower imports from the United Kingdom (unwrought gold).

Canada's trade deficit with countries other than the United States narrowed from $10.1billion in November to $9.5billion in December.

Energy products drive the quarterly increase in exports for a second consecutive quarter

After increasing2.8% in the third quarter, exports rose1.6% in the fourth quarter. Exports of energy products (+6.2%) contributed the most to the quarterly increase. Excluding this product section, exports edged up0.3% in the fourth quarter.

Imports were up0.2% in the fourth quarter. Offsetting movements in imports of consumer goods (+4.3%) and imports of motor vehicles and parts (-4.3%) were observed in the fourth quarter.

In real terms, quarterly exports increase, while imports decline

In real terms (calculated using2017chained dollars), exports were up1.0% in the fourth quarter of2023. This followed a decline of0.4% in the third quarter. Real exports of energy products (+4.9%) contributed the most to the increase in the fourth quarter, which coincided with higher crude oil production in Alberta.

Real imports were down0.5% for a second consecutive quarter. After a record third quarter, imports of motor vehicles and parts (-5.0%) decreased the most in the fourth quarter.

Canada's merchandise trade balance for the year2023was essentially balanced

Canada's annual merchandise trade balance with the world moved from a surplus of $19.7billion in2022to a slight deficit of $1.4billion in2023. The change in the annual merchandise trade balance was attributable to higher imports (+1.4%) combined with a virtually equivalent decrease in exports (-1.4%).

The gain in imports in2023was largely attributable to a sharp increase in imports of motor vehicles and parts (+19.5%), while the drop in exports was driven by a large decline in exports of energy products (-18.9%).

In terms of trade activity, Canada's total merchandise trade (imports plus exports) remained essentially unchanged in2023, standing at $1.5trillion for a second consecutive year.

Consult "The International Trade Explorer" to explore the annual results of Canada's international trade (on a customs basis) in an interactive format.

Revisions to November merchandise export and import data

Imports in November, originally reported at $64.2billion in the previous release, were revised to $64.3billion in the current reference month's release. Exports in November, originally reported at $65.7billion in the previous release, were revised to $65.3billion in the current reference month's release.

Monthly trade in services

In December, monthly service exports were up1.3% to $16.9billion. Meanwhile, imports edged up0.3% to $17.6billion.

When international trade in goods and services are combined, exports decreased1.3% to $80.9billion in December, while imports increased0.2% to $82.0billion. As a result, Canada's total trade balance with the world went from a slight surplus of $173million in November to a deficit of $1.0billion in December.

Products

The product "International trade monthly interactive dashboard" (Catalogue number71-607-X) is now available. This new interactive dashboard is a comprehensive analytical tool that presents monthly changes in Canada's international merchandise trade data on a balance-of-payments basis, fully supporting the information presented every month in the Daily release.

The product "The International Trade Explorer" (Catalogue number71-607-X) is now available online.

The online Canadian International Merchandise Trade Database is no longer available. It has been replaced by the Canadian International Merchandise Trade Web Application (Catalogue number71-607-X), a modern tool that provides trade data users with a number of enhancements.

The updated "Canada and the World Statistics Hub" (Catalogue number13-609-X) is now available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive charts and tables. It provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, Japan, Belgium, Italy, the Netherlands and Spain.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; [email protected]) or Media Relations ([email protected]).