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Economic News

Canada: The Trade Balance Narrowed in October

December 5, 2024
Marc-Antoine Dumont
Senior Economist

Highlights

  • Canada’s international merchandise trade balance deficit narrowed from -$1.3B in September to -$0.9B in October.
  • Exports increased by 1.1% m/m while imports edged up by 0.5% in October. In real terms, both exports and imports were up, with gains of 0.4% and 0.8%, respectively.
  • Canada’s trade deficit with countries other than the United States narrowed from $9.2B to $7.1B. The trade surplus with the US also edged down to $6.2B from $7.9B.

Comments

On the export side, it is mostly a metal story as the exports of metal and non-metallic mineral products rose by 10.6% in October. Excluding this category, total exports would have only risen by 0.2%. This surge in metal exports is due to the recent price increase in precious metals, supported by strong demand from investors and central banks. Exports of unwrought gold, silver, and platinum group metals, and their alloys were up by 20.9% in October.

 

While most categories of imports declined in October, imports of metal ores and non-metallic minerals increased by 46.1% or $0.6B. Excluding this category, total imports would have receded by 0.5%. It is important to note that due to a change in how the data is collected, Statistics Canada expects significant revisions to October international merchandise trade data.

Implications

While the October trade deficit came in narrower than expected, we still anticipate real GDP growth in the last quarter of 2024 to be around 2.0%–2.5% (annualized). This is in line with the Bank of Canada’s estimate of 2.0%. Donald Trump’s return to the White House and the lingering threat of tariffs could create fluctuations in both exports and imports in the coming months.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.