Canada's Merchandise Trade Surplus Hits Record $3.9 Billion in June

Canada's merchandise trade surplus has grown to $3.9 billion in June, according to Statistics Canada. This increase is attributed to a weaker loonie, which pushed trade values higher. The agency notes that the average value of the Canadian dollar dropped 1.7 cents US in June compared to May, its largest monthly decline since October 2022.

When expressed in U.S. dollars, exports declined by two percent in June, while imports dropped 2.1 percent. In contrast, total exports gained 0.4 percent in Canadian dollars, reaching a record $77.5 billion. This increase was largely driven by a 16.5 percent rise in metal and non-metallic minerals exports, boosted by higher gold shipments.

However, the overall gain in exports was offset by a 10 percent drop in energy product exports in June due to falling oil prices. Total imports edged up 0.2 percent in June, mainly driven by a 59 percent surge in computer and computer peripherals imports. In volume terms, total exports were up 1.1 percent, while imports were down 1.5 percent.

StatCan also reported that total exports in the second quarter rose 13.1 percent, the strongest quarterly increase since the third quarter of 2020. Almost half of this increase came from higher energy products exports, as oil prices rose amid the conflict in the Middle East. Exports of motor vehicles and parts were also up 19.3 percent, following two quarters of declines.

Economists at CIBC Capital Markets and TD note that while export volumes may see a small bump due to companies potentially impacted by new U.S. tariffs, there could be a negative effect afterwards if the tariffs actually come into effect. The U.S. government has announced plans to impose a 50 percent tariff on hundreds of categories of Canadian goods, set to take effect on August 19.