Data released by Statistics Canada on Tuesday indicated that after three months of trade deficits, Canada achieved a trade surplus of CAD 638 million (USD 461 million) in June 2024. This turnaround was driven by the operational launch of Canada’s oil pipeline expansion project and a surge in global gold demand, significantly boosting the country’s exports.
In detail, Canada’s exports rose by 5.5% in June. Energy product exports, which constitute over a fifth of Canada’s total exports, increased sharply by 11.7%, led by crude oil. Deliveries of metal and non-metallic minerals, accounting for more than a tenth of total exports, rose by 11.8%, driven by unwrought gold. Statistics Canada noted that aside from price hikes, the growth in crude oil export volume was the largest contributor.
Imports increased by just 1.9%, with passenger cars and light trucks imports growing by 8.2% to a record CAD 6.8 billion. By volume, Canada’s exports rose by 3.8% in June, while imports increased by 1.3%. Additionally, Canada’s trade surplus with the U.S. expanded from CAD 8.8 billion to CAD 9.4 billion, marking the third consecutive monthly increase.
The trade data for June caught the market by surprise, as analysts had anticipated a trade deficit of CAD 1.84 billion. Meanwhile, the May trade deficit was revised down from CAD 1.93 billion to CAD 1.61 billion.
After a lengthy 12-year construction and an investment of CAD 34 billion, the Trans Mountain Expansion Project (TMEP) officially commenced commercial operation on May 1, unlocking access to the Asia-Pacific market for Canada’s domestic crude producers. Trans Mountain is Canada’s only oil pipeline to the West Coast, and after expansion, its daily transport capacity will increase from about 300,000 barrels to 890,000 barrels, significantly enhancing Alberta’s oil export capacity.
Poten & Partners stated that Canada will compete with Russia, the Middle East, and the U.S. for the Asian crude oil market. Currently, nearly all Canadian crude is exported to the U.S. Gulf Coast. With the pipeline expansion, Canada aims to tap into more lucrative Asian markets, including China, Japan, and South Korea. As for the distribution of crude between Asia and the U.S. West Coast, some experts predict a 50/50 split, while others believe as much as 75% could eventually go to Asia.
