Canada posted a merchandise trade deficit of $3.4 billion in May as imports of unwrought silver soared and lower oil prices weighed on exports, Statistics Canada said Thursday.
The result was the largest deficit since October 2020 and compared with a revised surplus of $894 million in April.
TD Bank economist Marc Ercolao said that while the report appeared to be following a broader downtrend in May, export activity in crude oil is expected to rebound in June as oil production in Alberta came back online after wildfires.
“More forward looking, the B.C. port strike, now entering it’s sixth day and affecting more than 7,000 workers, will likely put a dent in July’s trade figures, as affected ports on the West Coast handle a quarter of Canada’s international trade,” Ercolao wrote in a report.
Overall, Statistics Canada said exports fell 3.8% to $61.5 billion in May as exports of energy products fell 7.3%, in large part due to lower prices. Crude oil exports fell 8.3% and exports of coal lost 14.5%.
Exports of farm, fishing and intermediate food products also dropped 13.4% for the month.
Meanwhile, imports rose 3.0% in May to $65 billion as imports of metal and non-metallic mineral products rose 12.3%, helped higher by shipments of unwrought silver from the United Kingdom.
Imports of motor vehicles and parts gained 4.5% in May to reach a record-high $11.3 billion as imports of engines and parts rose 6.9% and passenger cars and light trucks gained 4.6%.
In volume terms, overall exports fell 2.5% in May, while imports rose 3.5%.
Regionally, Statistics Canada said the country’s merchandise trade surplus with the U.S. narrowed to $6.7 billion in May compared with $8.7 billion in April as exports to the U.S. fell 2.9% and imports from Canada’s largest trading partner rose 1.3%.
Canada’s merchandise trade deficit with countries other than the United States was $10.2 billion in May compared with $7.8 billion in April.
In a separate report, Statistics Canada said the international trade in services deficit for May was $1.1 billion compared with $1.2 billion in April as imports of services fell 0.5% and exports of services were essentially unchanged.
Canada’s trade balance when the country’s trade in goods and services were combined came to a deficit of $4.6 billion in May compared with a deficit of $316 million in April.