Photo: finance
Unexpected Positive Balance
In June 2024, Canada unexpectedly recorded a positive trade balance of CAD 638 million (USD 461 million), surprising economists. Forecasts had predicted a deficit, but reality proved otherwise thanks to a significant increase in exports of energy resources and gold.
Expansion of the Trans Mountain Pipeline
A key factor in achieving a positive trade balance was the expansion of the Trans Mountain pipeline. Since its launch in May, the expansion has nearly tripled the pipeline’s capacity, leading to an 11.7% increase in crude oil exports to Asia in June. This expansion has bolstered Canada’s position in the energy market.
Increase in Gold Exports
Another important contributor was the rise in gold exports. Strong international demand, particularly from the United Kingdom, led to an 11.8% increase in the export of metals and non-metallic minerals in June. Geopolitical upheavals and fluctuations in gold prices also played a role in this increase.
Stable Domestic Demand
Import data reflect stable consumer demand in Canada. In June, imports of passenger cars and consumer goods rose by 8.2% to a record CAD 6.8 billion. This indicates recovery from previous production disruptions and supply delays in the US.
Market Reactions and Currency Movements
The trade balance data coincided with reports from the US, where the trade deficit also narrowed. Canada’s two-year government bond yields rose to 3.213%, while the Canadian dollar fell slightly to C$1.384 per USD. These changes reflect market reactions to the latest economic data.
Strengthening Trade Relations with the US
Canada is seeing an increase in its positive trade balance with the US, reaching CAD 9.4 billion. This trend highlights the strengthening of economic ties and the importance of bilateral trade.
Source: Bloomberg
