Canadian international merchandise trade, February 2020
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Released: 2020-04-02
Canada's merchandise exports rose 0.5% in February, because of higher exports of aircraft, while imports were down 0.8%, in part due to a decrease in crude oil imports. As a result, Canada's merchandise trade deficit with the world narrowed from $1.7 billion in January to $983 million in February.
Chart 1
Merchandise exports and imports
Aircraft exports rise while crude oil export prices fall
Total exports were up 0.5% to $48.3 billion in February, with 8 of 11 product sections increasing. Non-energy exports rose 2.3%. In real (or volume) terms, exports increased 2.7%.
Chart 2
Contributions to the monthly change in exports, by product, February 2020
Exports of aircraft and other transportation equipment and parts rose 18.5% in February. Aircraft exports (+46.8%) reached the highest level in five years, largely due to an increase in exports of private jets. Excluding aircraft, total exports decreased 0.3% in February.
Chart 3
Canadian exports of aircraft
Exports of motor vehicles and parts were up 3.1% in February. After posting an 8.2% decline in January due to extended temporary shutdowns at certain automotive assembly plants, exports of passenger cars and light trucks (+4.0%) partially rebounded in February.
Moderating the overall export increase, energy products fell 7.0% in February. Crude oil exports (-6.5%) led the decline as lower prices more than offset an increase in volumes. Exports of refined petroleum products (-15.0%) were also down in February, in part because of lower prices.
Imports of crude oil decline
Total imports fell 0.8% to $49.3 billion in February, the lowest level in the past two years. Decreases were observed in 7 of 11 sections, with energy products posting the largest decline. In real (or volume) terms, imports fell 1.2%.
Chart 4
Contributions to the monthly change in imports, by product, February 2020
Imports of energy products fell 16.0% in February, following a high observed in January. Crude oil imports were the largest contributor to the decline, offsetting the January increase. Lower shipments of crude oil from the United States contributed the most to the February decrease.
Higher imports of aircraft and other transportation equipment and parts (+27.3%) moderated the decline in total imports. Imports of aircraft were up by $565 million in February to reach their highest level since February 2019. High-value airliners from the United States and Europe were primarily responsible for the gain in February. Without imports of aircraft in February, total imports fell 2.0%.
Chart 5
Canadian imports of aircraft
International trade data by mode of transport
Data on international trade by mode of transport are available on a customs basis and are not seasonally adjusted. The mode of transport in international trade statistics represents the mode used to transport goods from one economic territory to another.
In the context of disruptions in rail transportation in February, related to various blockades across Canada, there are no indications of a significant impact on international merchandise trade by rail. However, rail transport plays a key role in international trade by the marine mode, which posted low levels compared with February 2018 and February 2019. On the other hand, this drop in levels could also be associated with decreased trade with the countries hardest hit by COVID-19 in February.
Trade with non-US countries decreases for a second consecutive month
Imports from countries other than the United States were down 5.6% in February, the second consecutive monthly decrease. Imports from China (-6.8%), South Korea (-26.8%) and Peru (-32.4%) posted the largest declines.
After falling 3.1% in January, exports to countries other than the United States decreased 5.3% in February. These exports totalled $11.8 billion, the lowest level since February 2019. The main contributors to the decrease were exports to the United Kingdom (-21.4%), Hong Kong (-70.8%) and China (-6.4%).
Consequently, Canada's trade deficit with countries other than the United States narrowed from $5.0 billion in January to $4.7 billion in February. This is the smallest deficit observed since November 2018.
Chart 6
Canada's imports and exports with countries other than the United States
Exports to the United States were up 2.5% in February, in part because of aircraft and passenger cars. Imports from the United States rose 1.7%, mainly on higher aircraft imports.
As a result, Canada's trade surplus with the United States widened from $3.4 billion in January to $3.7 billion in February.
When the average exchange rates of January and February are compared, the Canadian dollar lost 1.1 US cents relative to the American dollar.
Chart 7
International merchandise trade balance
COVID-19
Statistics Canada is closely monitoring the possible impacts of the novel coronavirus (also known as COVID-19) on Canada's international merchandise trade data. Because of efforts made by many countries—including Canada—to slow the spread of the virus, the effects of the pandemic on Canada's trade activity could be significant.
Impact of COVID-19 on February data
When looking at international merchandise trade as a whole, COVID-19 did not appear to have a major impact in February, though trade with China was once again affected. Imports from China continued their downward trend in February (-6.8%), after reaching their lowest level in three years in January. Lower imports of computers and peripherals, cellphones, and clothing and accessories were the main contributors to the decline.
Exports to China (-6.4%) also fell for a second consecutive month, notably on lower exports of lobster and crab.
Meanwhile, imports from South Korea (-26.8%) fell in February. However, exports to that country increased 29.5%.
Lastly, crude oil prices fell in February, partly due to the uncertainty surrounding the virus and to lower demand given the widespread slowdown in economy activity.
Possible impacts in the coming months
In March, a number of North American automotive manufacturers halted production. This could have a significant effect on Canada's merchandise trade. Imports and exports of motor vehicles and parts represented more than 17% of total merchandise trade in 2019.
In addition, there have recently been strong movements in crude oil market prices. Crude oil exports are important for Canada's international merchandise trade, representing almost 14% of total exports in 2019. Fluctuations in oil prices are closely linked to month-to-month changes in the value of exports of crude oil. These movements are generally observed in international trade data with a certain delay.
Other factors such as manufacturing plant closures in the aviation industry or simply a decline in global supply and demand could pull Canada's trade activity downward in the coming months. The recent decrease in the exchange rate could also affect trade values.
Statistics Canada will continue to report on the impacts of COVID-19 on Canada's international merchandise trade as information becomes available.
Note on international merchandise trade data production
The current situation is also affecting the production of statistics. The agency's ability to contact companies to validate transactions or seek explanations about anomalies may be hindered, which could result in larger revisions and less contextual information in The Daily.
International merchandise trade data also rely on external sources that may not be available for the production of the statistics. This, in turn, could have an impact on the quality of the published data.
Revisions to January merchandise exports and imports
Imports in January, originally reported as $49.6 billion in the previous release, were revised to $49.7 billion in the current month's release. Exports in January, originally reported as $48.1 billion in the previous release, were essentially unchanged in the current month's release.
Monthly trade in services
Monthly exports of services edged down 0.3% to $11.0 billion in February, while imports of services decreased 0.5% to settle at $12.7 billion.
Combining international trade in goods and services, exports rose 0.4% to $59.3 billion in February, while imports fell 0.8% to $62.0 billion. As a result, Canada's trade deficit with the world for goods and services combined totalled $2.7 billion in February.
Note to readers
Merchandise trade is one component of Canada's international balance of payments (BOP), which also includes trade in services, investment income, current transfers, and capital and financial flows.
International trade data by commodity are available on both a BOP and a customs basis. International trade data by country are available on a customs basis for all countries and on a BOP basis for Canada's 27 principal trading partners (PTPs). The list of PTPs is based on their annual share of total merchandise trade—imports and exports—with Canada in 2012. BOP data are derived from customs data by making adjustments for factors such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts.
For a conceptual analysis of BOP versus customs-based data, see "Balance of Payments trade in goods at Statistics Canada: Expanding geographic detail to 27 principal trading partners."
For more information on these and other macroeconomic concepts, see the Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) and the User Guide: Canadian System of Macroeconomic Accounts (13-606-G).
Data in this release are on a BOP basis and are seasonally adjusted. Unless otherwise stated, values are expressed in nominal terms, or current dollars. References to prices are based on aggregate Paasche (current-weighted) price indexes (2012=100). Volumes, or constant dollars, are calculated using the Laspeyres formula (2012=100).
For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Revisions
In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Current-year revisions are reflected in both the customs and BOP-based data.
The previous year's customs-based data are revised with the release of the January and February reference months, and thereafter on a quarterly basis. The previous two years of customs-based data are revised annually, and revisions are released in February with the December reference month.
The previous year's BOP-based data are revised with the release of data for the January, February, March and April reference months. To remain consistent with the Canadian System of Macroeconomic Accounts, revisions to BOP-based data for previous years are released annually in December with the October reference month.
Factors influencing revisions include the late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates produced for the energy section with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.
For information on data revisions for crude oil and natural gas, see "Revisions to trade data for crude oil and natural gas."
Revised data are available in the appropriate tables.
Real-time data table
Real-time table 12-10-0120-01 will be updated on April 20.
Next release
Data on Canadian international merchandise trade for March will be released on May 5.
Products
Because of the current situation, the product "International Trade Explorer" (71-607-X) will not be updated with revised data published in the current month.
Customs-based data are now available in the Canadian International Merchandise Trade Database (65F0013X).
The updated Canada and the World Statistics Hub (13-609-X) is now available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, Japan, Belgium, Italy, the Netherlands, and Spain.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).
To enquire about the concepts, methods or data quality of this release, contact Benoît Carrière (613-415-5305; benoit.carriere@canada.ca), International Accounts and Trade Division.
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