According to Statistics Canada, Canada's merchandise trade deficit with the world widened from $891 million in September to $1.2 billion in October. Canada's exports were down 1.2 percent in October, principally on lower exports of crude oil. Imports were down 0.6 percent, mainly due to fewer imports of passenger cars and light trucks.
In real (or in volume) terms, exports showed an opposite movement (+1.2 percent) compared with nominal export values in October, as lower energy product prices led to a 2.3 percent decrease in total export prices. Meanwhile, real imports were essentially unchanged in October.
Exports of motor vehicles and parts were up 4.4 percent to $7.8 billion in October. Passenger cars and light trucks (+6.6 percent) contributed the most to the increase. This reflected a drawdown of motor vehicle inventories that had increased in recent months. Year to date, the cumulative value of exports of passenger cars and light trucks was down 7.6 percent compared with the same period last year.
Declines in imports were observed in 7 of 11 sections, led by motor vehicles and parts, and basic and industrial chemical, plastic and rubber products. Partially offsetting these decreases were higher imports of aircraft and other transportation equipment and parts. Year over year, total imports increased 9.6 percent.
Imports of motor vehicles and parts declined 3.5 percent to $9.1 billion in October. There were lower imports of passenger cars and light trucks, down 5.8 percent to $3.9 billion, the first time import levels have fallen below $4 billion since December 2016. This was the sixth decrease in the past seven months for imports of passenger cars and light trucks, reflecting lower auto sales in Canada in recent months. Moreover, imports of electric cars fell sharply in October after peaking in September, coinciding with the end of the rebate program in Ontario for these vehicles.
Partially offsetting the overall decrease in October were higher imports of aircraft and other transportation equipment and parts, up 11.3 percent to $1.7 billion. After reaching its lowest level in more than five years in the third quarter of 2018, imports of aircraft rose in October, mainly on higher imports of airliners from the United States.
Imports from countries other than the United States fell 4.1 percent to $17.1 billion in October. Contributing to the decrease were lower imports from China (various products), Japan (passenger cars and light trucks), the United Kingdom (motor gasoline) and Saudi Arabia (crude oil).
Exports to countries other than the United States were up 2.3 percent to $12.9 billion. Higher exports to Hong Kong (gold) and Japan (canola) were partially offset by lower exports to the United Kingdom (gold). As a result, Canada's trade deficit with countries other than the United States narrowed from $5.2 billion in September to $4.2 billion in October, the smallest deficit since December 2016.
Exports to the United States fell 2.3 percent to $36.5 billion, mainly on lower exports of crude oil. Imports were up 1.3 percent to $33.4 billion. As a result, Canada's trade surplus with the United States narrowed from $4.3 billion in September to $3.1 billion in October, the smallest surplus since March 2018.