Canadian trade balance showing a deficit in May

Canada's exports of energy products increased 7.1% to $5.3 billion in May. For the section as a whole, prices were up 9.7%, while volumes were down 2.3%. Exports of crude oil and crude bitumen were the principal contributor to the gain, up 10.5% to $3.8 billion, mostly on higher prices (+9.9%). Volumes also rose (+0.6%) despite the wildfires in northeastern Alberta. Preliminary evidence indicates that Canadian refinery activity declined in May, freeing up crude oil supply for export, while the remaining shortfall was largely met by a drawdown of Alberta inventories of crude oil. Finally, although crude oil and crude bitumen export volumes for May increased, export volumes for April and May were below recent levels.

Imports of energy products increased 18.2% to $2.1 billion in May, the third consecutive monthly gain. Volumes were up 12.1% and prices rose 5.5%. Widespread increases throughout the section were led by refined petroleum energy products, up 63.8% to $694 million.

In real (or volume) terms, exports decreased 2.3% in May, led by energy products; farm, fishing and intermediate food products; and motor vehicles and parts. Import volumes were down 0.9%, as lower imports of aircraft and other transportation equipment and parts, and metal and non-metallic mineral products were partially offset by higher imports of energy products. Consequently, Canada's trade balance in real terms went from a $213 million surplus in April to a $317 million deficit in May.