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Canada posted a merchandise trade deficit of $2.2 billion for November as exports of gold as well as motor vehicles and parts fell in the month, Statistics Canada said Thursday.
The agency said the result compared with a revised trade deficit of $395 million in October.
However, RBC senior economist Claire Fan noted that despite the deteriorating trade balance, Canadian exporters continued to show signs of at least some diversification to non-U.S. markets.
“Goods exports to non-U.S. destinations were 29 per cent above year-ago levels in November, while goods imports from non-U.S. markets rose 18 per cent both near or at all-time highs,” Fan wrote in a report.
The comments came as Canada’s trade surplus with the U.S. amounted to $6.6 billion in November, up from $5.2 billion in October as exports to the U.S. for the month fell 1.8 per cent and imports from Canada’s largest trading partner fell 5.4 per cent.
Meanwhile, Canada’s trade deficit with countries other than the U.S. was $8.8 billion in November compared with a deficit of $5.6 billion in October as imports from countries other than the U.S. rose 7.8 per cent to hit an all time high. Exports to places other than the U.S. fell 4.9 per cent.
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Overall, total exports fell 2.8 per cent in November to $63.9 billion.
The drop came as exports of metal and non-metallic mineral products plunged 24.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys — a category largely composed of unwrought gold — fell.
Statistics Canada noted that large declines were seen in exports of unwrought gold to the United Kingdom, the United States and Hong Kong in November.
Meanwhile, exports of motor vehicles and parts fell 11.6 per cent to reach their lowest level in three years as exports of passenger cars and light trucks fell nine per cent, mainly due to lower production.
Total imports fell 0.1 per cent in November to 66.1 billion.
Imports of motor vehicles and parts dropped 4.5 per cent as imports of passenger cars and light trucks fell 4.8 per cent mainly because of lower imports from the United States.
In volume terms, total exports in November fell 0.9 per cent, while imports rose 0.9 per cent.
BMO senior economist Shelly Kaushik said despite some support from diversification, trade headwinds will remain until there is certainty in the form of relief on sectoral tariffs and clarity on the future of the free trade agreement with the United States and Mexico.
“Looking through the volatility from energy and metals prices, it’s clear that Canadian trade flows remain under pressure as long as uncertainty stays elevated,” Kaushik said.
In a separate report, Statistics Canada said the country’s international trade in services had a surplus of $11 million for November, what it called an “essentially balanced position” compared with a surplus of $422 million in October.
When international trade in goods and services are combined, Canada’s total trade balance with the world posted a deficit of $2.2 billion in November compared with a surplus of $27 million in October.
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