- The merchandise trade of Canada surplus decreased to $422 million in Feb 2023 from $1.2 billion in Jan, as both exports and imports declined by 2.4% and 1.3%, respectively.
- Exports of metal and non-metallic mineral products, motor vehicles and parts, and aircraft and other transportation equipment and parts decreased in Feb, while farm, fishing, and intermediate food product exports rose.
- Canada’s merchandise trade surplus with the US narrowed to $6.2 billion in Feb, and its trade deficit with countries other than the US widened to $8.9 billion.
Editor’s Notes: In this report, we have used data from the Statistics Canada website.
The merchandise trades of Canada and imports decreased in February 2023, following a strong increase in January. Exports were down by 2.4%, while imports decreased by 1.3%. As a result, Canada’s merchandise trade surplus with the world narrowed to $422 million in February from $1.2 billion in January. This article will discuss the Canadian international merchandise trade for February 2023 in detail.
Overview of Canadian international merchandise trade in February 2023
In February 2023, Canada’s merchandise trade surplus with the world narrowed to $422 million, down from $1.2 billion in January 2023. This is due to the decrease in exports and imports, which declined by 2.4% and 1.3%, respectively. Despite the monthly decrease, total import values were higher than in November and December 2022, when declines were also observed.
All Product Sections Decreased, Except Farm, Fishing, and Intermediate Food Product Exports
All product sections decreased in February 2023, except for farm, fishing, and intermediate food product exports, which rose for the fifth time in the last six months. The increase was due to higher exports of fresh and frozen pork, soybeans, canola, wheat, and other grains. However, despite this increase, the overall decline in exports was due to the decreases in other product sections.
Merchandise Exports of goods decreased by 2.4%
Total exports fell by 2.4% to $65.0 billion in February 2023, following a 3.5% increase in January. All product sections decreased, except farm, fishing, and intermediate food product exports, which rose for the fifth time in the last six months. In real (or volume) terms, total exports decreased by 0.9%, following a 4.8% increase in January.
Merchandise Exports of metal and non-metallic mineral products decreased by 5.4%
Exports of metal and non-metallic mineral products decreased by 5.4% in February 2023. After rising by 17.9% in January, exports of unwrought gold, silver, and platinum group metals and their alloys were down by 11.5% in February. As of January, refined gold exports to the United Kingdom contributed the most to the monthly change. Exports of unwrought nickel and nickel alloys also contributed to the decline in this product section in February, largely due to lower exports to Norway.
Merchandise Exports of motor vehicles and parts decrease by 4.4%
After reaching their highest level since May 2019, exports of motor vehicles and parts fell by 4.4% to $7.9 billion in February 2023. Exports of passenger cars and light trucks led to a decrease in this product section, decreasing by 7.3%. Monthly variations in the number of motor vehicles manufactured in Canada in January and February 2023 were the opposite of the monthly change observed for the same months in 2022, resulting in strong variations in exports on a seasonally adjusted basis for the first two months of 2023. While supply chain issues appear to be easing, they remain a significant factor in the export movements observed in recent months.
Exports of aircraft and other transportation equipment and parts fall by 14.9%
In February 2023, exports of aircraft and other transportation equipment and parts fell by 14.9% to $1.9 billion, the lowest value observed since April 2022. The decline in aircraft exports may also be due to a reduction in air travel and demand for new aircraft due to the ongoing COVID-19 pandemic.
Merchandise Trade balance with different countries
Canada’s merchandise trade surplus with the United States narrowed from $6.9 billion in January to $6.2 billion in February. Exports to the United States were down 0.9% to $36.3 billion, while imports decreased 2.7% to $30.1 billion. The decrease in imports from the United States was largely due to lower imports of motor vehicles and parts (-7.7%) and aircraft and other transportation equipment and parts (-50.2%). The decrease in aircraft imports from the United States was partly responsible for the decline in imports of these products overall.
Canada’s merchandise trade deficit with countries other than the United States widened from $7.4 billion in January to $8.9 billion in February. Exports to countries other than the United States were down 7.2% to $19.8 billion, while imports increased 1.3% to $28.7 billion.
Merchandise Trade by product
Exports of energy products fell 2.6% to $12.9 billion in February. Crude oil exports were down 0.9%, while exports of natural gas (-2.8%) and refined petroleum energy products (-1.7%) also contributed to the overall decrease. The decrease in crude oil exports was largely due to lower prices, as export volumes were up in February
Exports of forestry products and building and packaging materials fell 3.3% to $4.4 billion in February. Lower exports of newsprint and other paper products (-7.9%) and sawmill and other lumber products (-4.7%) contributed to the overall decrease. However, higher exports of logs and other unprocessed forestry products (+14.2%) partly offset the decline.
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Exports of agricultural and fishing products
Exports of agricultural and fishing products decreased 3.9% to $3.3 billion in February. Lower exports of canola (-12.7%), wheat and meslin (-10.4%), and soybeans (-4.4%) were responsible for the overall decrease. However, higher exports of seafood products (+7.9%) partly offset the decline.
Imports of electronic and electrical equipment
Imports of electronic and electrical equipment and parts decreased 3.1% to $9.4 billion in February. This decline was largely due to lower imports of communication and audio and video equipment and parts (-11.1%) and of computer and peripheral equipment and parts (-6.9%).
Imports of consumer goods
Imports of consumer goods increased 0.6% to $10.8 billion in February. Higher imports of pharmaceutical products (+31.2%) and of clothing, footwear, and accessories (+7.3%) contributed to the overall increase. However, lower imports of other consumer goods (-2.2%), such as toys, games, and sporting equipment, partly offset the increase.
Implications for the Canadian Economy
The decrease in Canadian merchandise exports and imports in February 2023 follows several months of strong growth in these areas. While the decline may be partly attributed to seasonal factors and monthly variations, it may also reflect ongoing supply chain disruptions and other challenges related to the COVID-19 pandemic.
Despite the monthly decline in exports, certain sectors, such as farming, fishing, and intermediate food products, have shown consistent growth in recent months. In addition, while exports of passenger cars and light trucks decreased in February, they remain significantly higher than in the same period last year.
| Category | Feb 2023 | Jan 2023 | Monthly Change |
|---|---|---|---|
| Merchandise trade surplus | $422m | $1.2bn | -64.8% |
| Exports | $65.0bn | $66.6bn | -2.4% |
| Imports | $64.6bn | $65.5bn | -1.3% |
| Trade surplus with the US | $6.2bn | $6.9bn | -10.1% |
| Trade deficit with others | $8.9bn | $7.4bn | 20.2% |
| Exports of energy products | $12.9bn | $13.2bn | -2.6% |
| Exports of forestry products and building and packaging materials | $4.4bn | $4.5bn | -3.3% |
Note: Numbers in the table are in Canadian dollars.
Conclusion
Canada’s merchandise exports and imports decreased in February 2023, resulting in a narrowed merchandise trade surplus of $422 million. All product sections decreased except for farm, fishing, and intermediate food product exports. Exports of metal and non-metallic mineral products, motor vehicles and parts, and aircraft and other transportation equipment and parts decreased. Canada’s merchandise trade surplus with the United States narrowed while the trade deficit with other countries widened. Exports of energy products, forestry products, building and packaging materials, and agricultural and fishing products also decreased. Imports of electronic and electrical equipment and parts decreased.
