Canada recorded a trade deficit of CAD 0.92 billion in October 2024, improving from the previous month’s CAD 1.26 billion gap. However, this deficit was still wider than the expected CAD 0.8 billion, marking the eighth consecutive month of a trade shortfall. Despite the slight narrowing, Canada’s trade balance continues to reflect ongoing challenges in managing imports and exports amid global economic pressures.

Imports Rise, Driven by Metal Ores and Energy Products

Imports to Canada rose by 0.5% to CAD 65.1 billion in October. This increase was largely driven by significant gains in metal ores and energy products. Metal ores surged by 46.1% to CAD 3.2 billion, while energy product imports grew by 6.2% to CAD 7.9 billion. These gains were partially offset by declines in consumer goods, which fell by 1.6% to CAD 11.5 billion, and chemicals, which dropped by 2.3% to CAD 4.2 billion. Despite these offsetting declines, the overall increase in imports reflects rising demand for critical resources and energy products, particularly as Canada’s industries and sectors continue to recover from earlier disruptions.

Exports Show Modest Growth, Led by Minerals and Pharmaceuticals

On the export side, Canada saw a 1.1% increase to CAD 64.2 billion in October 2024. The growth was largely driven by significant gains in metal and non-metallic mineral products, which jumped by 10.6% to CAD 8.6 billion, particularly unwrought gold, which saw a 20.9% rise. Pharmaceutical goods also saw a substantial increase of 36.8%, reaching CAD 4.1 billion. These export sectors highlight Canada’s strong performance in mining and pharmaceuticals, key drivers of the country’s export economy.

Trade with the US and Other Countries Shows Diverging Trends

Canada’s trade dynamics with the US showed signs of slowing. Exports to the US fell by 2.8%, narrowing the trade surplus with its southern neighbor from CAD 7.9 billion to CAD 6.2 billion. In contrast, Canada’s exports to other countries surged by 13.1%, helping reduce the non-US trade deficit from CAD 9.2 billion to CAD 7.1 billion. This shift reflects a growing diversification of Canada’s export markets, which may provide some insulation from potential slowdowns in the US economy and suggests the potential for new opportunities in global trade.

Conclusion: Mixed Signals for Canada’s Trade Balance

While Canada’s trade deficit in October 2024 improved slightly, the country continues to face significant challenges in balancing imports and exports. The growth in imports, particularly in energy and metal ores, highlights the country’s reliance on foreign goods to fuel its industrial and energy sectors. On the export side, Canada’s mineral and pharmaceutical products continue to perform well, but a drop in US exports raises concerns about future trade dynamics. Moving forward, Canada’s ability to maintain a diverse export base and reduce its dependency on the US market will be crucial for achieving a sustainable trade balance.