According to Statistics Canada, in September, Canada's merchandise exports rose 1.3 percent, while imports increased 0.4 percent. As a result, Canada's merchandise trade surplus with the world widened from $550 million in August to $1.1 billion in September.
A large proportion of import and export transactions are completed in US dollars and must be converted to Canadian dollars to compile monthly trade statistics. When the Canadian dollar depreciates against the US dollar, converted monthly trade values in Canadian dollars are higher.
In September, the average value of the Canadian dollar decreased 2.3 US cents compared with the average value in August, falling to 75.1 US cents. This was the largest monthly decrease since March 2020. When expressed in US dollars, Canadian exports were down 1.7 percent in September, and imports decreased 2.5 percent. The Canadian dollar also depreciated in October, by 2.1 US cents, and this decline will also have an impact on the results published for the next reference month.
Lower exports of metal ores and non-metallic minerals (-11.4 percent) partially offset the overall increase in total exports in September. Following a significant rise in export values for potash that began in August 2021 and led to a record high in August 2022, these exports fell 16.4 percent in September. While the recent upward trend in exports of potash was largely the result of higher prices, the September decline was mainly driven by lower volumes. Significant decreases in shipments of potash destined to Brazil and the United States were observed in September. Despite the monthly decline, potash export values have more than doubled compared with September 2021.
Total imports increased 0.4 percent in September to reach $65.2 billion. Increases were observed in 6 of the 11 product sections. In real (or volume) terms, however, total imports fell 0.8 percent.
Imports of industrial machinery, equipment and parts (+4.1 percent) rose significantly for a second consecutive month, reaching a record high of $7.7 billion in September. The largest increase came from imports within the subcategory "other general-purpose machinery and equipment," which rose 5.7 percent on higher imports of turbines and generator equipment destined for wind farm projects in Alberta. Higher imports of logging, construction, mining, and oil and gas field machinery and equipment (+17.4 percent) also contributed to the gain in September.
Exports to the United States fell 0.4 percent in September, a third consecutive monthly decline. At the same time, imports from the United States were up 0.4 percent. As a result, Canada's trade surplus with the United States narrowed from $10.2 billion in August to $9.8 billion in September, the lowest surplus since December 2021.
Following a decrease of 3.9 percent in August 2022, exports to countries other than the United States increased 7.0 percent in September, the strongest increase since May 2022. Exports to the United Kingdom (gold and crude oil), China (pulse crops, potash and grains) and Hong Kong (gold and crude oil) posted the largest gains.
Meanwhile, imports from countries other than the United States rose 0.5 percent in September. Higher imports from Italy (industrial machinery), Mexico (various products) and Brazil (metal ores, iron and steel) were partially offset by the decrease in imports from Belgium (pharmaceutical products) and Switzerland (copper).
The merchandise trade deficit with countries other than the United States narrowed from $9.6 billion in August to $8.7 billion in September.