OTTAWA
Canada’s merchandise trade surplus increased to $5.4 billion in September as shipments of crude oil and gold helped boost exports for the month.
Statistics Canada said the figure compared with a surplus of $5 billion in August.
However, BMO senior economist Shelly Kaushik said Wednesday the solid headline result masked some of the softness under the surface.
“While energy and precious metals are supporting exports, it’s clear that the latest round of tariffs weighed heavily in September,” she wrote in a report.
Trade talks between Canada and the United States broke down at the end of August followed by fresh tariffs by U.S. President Donald Trump and countermeasures by Canada.
Total exports edged up 0.2 per cent in September to $78.6 billion, as exports of energy products rose 8.2 per cent, helped by higher oil prices, while exports of metal and non-metallic mineral products, which includes unwrought gold, increased 8.6 per cent.
Excluding the energy product and metal and non-metallic mineral product categories, exports fell 5.6 per cent in September.
Exports of consumer goods fell 7.1 per cent, while electronic and electrical equipment and parts dropped 13.9 per cent and industrial machinery, equipment and parts decreased nine per cent.
Motor vehicles and parts fell 4.9 per cent.
Meanwhile, total imports fell 0.3 per cent in September to $73.2 billion as imports of motor vehicles and parts plunged 9.1 per cent in the month.
Excluding the motor vehicles and parts section, imports rose 1.5 per cent in September.
In volume terms, total exports fell four per cent, while imports fell 2.5 per cent.
CIBC senior economist Andrew Grantham said the details of the report painted a more troubling picture than suggested by the headline figures.
“The pullback in non-energy exports and total trade in volume terms confirms that August data may have been flattered by tariff front-running, and that new U.S. tariffs are having a negative impact on the economy,” Grantham wrote in a report.
“Even though trade negotiations are restarting, even if a deal is reached we still forecast that net trade will be a negative for GDP in the fourth quarter and that overall economic growth will dip slightly below one per cent.”
e2gold.ca reported in November that U.S. negotiators have dropped demands on French-language content and Canada's ability to sign other trade deals.
Regionally, Canada’s trade surplus with the United States was $12.3 billion in September compared with $12.1 billion in August as exports to the United States rose 0.7 per cent and imports from the United States gained 0.4 per cent for the month.
Canada’s trade deficit with countries other than the United States was $7 billion in September compared with $7.1 billion in August.
In a separate report, Statistics Canada said imports of services rose 1.5 per cent to $21 billion, while exports of services increased 0.9 per cent to $21.4 billion for September for a trade in services surplus of $300 million for the month compared with a surplus of $500 million in August.
When international trade in goods and services are combined, Canada’s total trade surplus with the world was $5.7 billion in September compared with $5.4 billion in August.
This story was written by the e2gold.ca newsroom from reporting by BNN Bloomberg and Investment Executive. Quotes are checked word for word against that reporting.