Prime Minister Mark Carney says the record trade deficit posted in April due to billions in lost exports to the U.S. proves his government’s economic strategy is the right one for Canada.
Statistics Canada on Thursday said the merchandise deficit grew to $7.1 billion in April from $2.3 billion in March, while overall exports fell nearly 11 per cent month-to-month. The drop was even larger for the U.S. amid crippling tariffs from Canada’s largest trading partner.
“The global economy is slowing, we all know that, and that has implications for Canada — we’re a trading nation,” Carney told Global News about the report as he headed to meetings on Parliament Hill.
“You don’t want to make too much of one piece of data, but there’s lots of indicators underneath that the strategy we’re pursuing to build the Canadian economy, to be masters of our own home, to have one Canadian economy not 13, to diversify our trading partners, that’s the right strategy for Canada.”
Overall exports fell 10.8 per cent in April to $60.4 billion, their lowest level since June 2023, as exports of motor vehicles and parts dropped 17.4 per cent, Statistics Canada reported.
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Exports of consumer goods also fell 15.4 per cent, while exports of energy products dropped 7.9 per cent.
Meanwhile, total imports fell 3.5 per cent in April to $67.6 billion as imports of motor vehicles and parts lost 17.7 per cent and industrial machinery, equipment and parts dropped 9.5 per cent.
In real or volume terms, total exports fell 9.1 per cent in April, while imports fell 2.9 per cent in April.
Canada posted a merchandise trade surplus with the U.S. of $3.6 billion in April, the smallest surplus with the country’s largest trading partner since December 2020.
The result came as exports to the U.S. fell 15.7 per cent and imports from the U.S. dropped 10.8 per cent.
“Exports are freefalling — now it’s a matter of whether there’s a cushion or concrete below,” said principal economist Andrew DiCapua at the Canadian Chamber of Commerce in a statement.
“Nearly $15 billion in Canadian exports to the U.S. has disappeared since the start of the year — a staggering hit to Canada as a trading nation.”
Meanwhile, Canada’s trade deficit with countries other than the U.S. was $10.7 billion in April compared with $9 billion in March.
Exports to countries other than the U.S. rose 2.9 per cent to $18.3 billion in April, while imports from countries other than the United States gained 8.3 per cent to hit a record $29 billion.
“As demand for Canadian goods weakens, the trade deficit is set to widen further,” says DiCapua.
“Exporters are trying to pivot to new markets, but diversion simply isn’t viable in some key sectors. For the Bank of Canada, the first of many declines in the hard data is here, turning soft guidance into sharp reality.”
—With files from Global’s Ari Rabinovitch, and the Canadian Press
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