Canada’s merchandise trade deficit with the world narrowed to $4.9 billion in July from $6 billion in June, according to Statistics Canada. Data released Thursday showed that merchandise exports rose 0.9% while imports fell 0.7%.
The increase in exports was mainly driven by a 4.2% rise in energy products and a 6.6% increase in exports of motor vehicles and parts. After falling 1.8% in June, crude oil exports were up 2.3% in July, with both prices and volumes contributing to the increase.
July is normally marked by temporary closures at automotive assembly plants for summer holidays, but the seasonal effects were blunted by the production slowdown related to U.S. tariffs.
Imports dropped in July following the one-time high-value import of a module destined for an oil project off the Newfoundland coast in June. Excluding this product section, total imports were up 2.2%. Despite the overall decline, increases were observed in 10 of the 11 product sections.
Sizable increases were seen in imports of aircraft and other transportation equipment and parts (11%), motor vehicles and parts (2.2%), consumer goods (1.6%) and farm, fishing and intermediate food products (7.8%).
Exports to the U.S. rose for a third consecutive month, while imports from the U.S. fell. Exports climbed by 5% in July, partly from higher exports of crude oil and passenger cars, as imports from the U.S. fell 2.2%. Thus, Canada’s trade surplus with the U.S. widened from $3.7 billion in June to $6.7 billion, the largest surplus since March 2025.
Exports to countries other than the U.S. fell 8.6% in July, a second consecutive monthly decline. Still, exports to these countries were up 14% compared to the same time last year. Lower exports to the United Kingdom (unwrought gold), the Netherlands (unwrought aluminum and crude oil) and Spain (various products) contributed the most to the monthly decrease. At the same time, imports from countries other than the U.S. increased 1.3% in July, widening Canada’s trade deficit with those countries to $11.7 billion from $9.7 billion in June.
Canada’s monthly international trade in services balance went from a deficit of $0.2 billion in June to a surplus of $0.5 billion in July. Exports of services rose 2.6% to $18.7 billion, and imports of services fell 1.3% to $18.2 billion.
Exports of travel services increased 4% to $5.5 billion, driven by increased spending by U.S.-resident travellers to Canada. Exports of commercial services rose 1.8% to $11.2 billion, led by an increase in non-financial services exports. Exports of transportation services were up 2.9% to $1.9 billion.
At the same time, imports of commercial services decreased 2.2% to $10.4 billion in July, as imports of financial services declined following a large increase in June. Imports of transportation services were down 1.9% to $3.2 billion in July, while imports of travel services increased 1.2% to $4.5 billion.