Canada's merchandise exports fell 3.4% and imports decreased 2.2% in July. As a result, Canada's trade deficit with the world expanded from $1.9 billion in June to $2.3 billion in July.
Exports fell to $37.7 billion as volumes decreased 2.0%. Energy products were the main contributor to the fall in exports.
Imports decreased to $40.1 billion, mainly as a result of lower imports of energy products as well as machinery and equipment. Both volumes (-1.2%) and prices (-1.0%) declined.
Exports to the United States fell 5.0% to $27.4 billion in July, while imports declined 2.1% to $25.3 billion. Consequently, Canada's trade surplus with the United States decreased from $3.0 billion in June to $2.1 billion in July, the smallest trade surplus since October 2010.
Imports from countries other than the United States decreased 2.4% to $14.7 billion while exports rose 1.2% to $10.3 billion. As a result, Canada's trade deficit with countries other than the United States narrowed from $4.9 billion in June to $4.4 billion in July.
Energy products: The largest contributor to the decrease in exports
Exports of energy products fell 8.5% to $8.2 billion in July on lower volumes and prices. Crude petroleum exports, down 9.6% to $5.1 billion, led the decline. Prices and volumes of crude petroleum have been trending downwards since January 2012. Exports of petroleum and coal product decreased for a third consecutive month, falling 10.7% to $1.8 billion, mainly the result of lower exports of light oils and fuel oils.
Exports of machinery and equipment decreased 5.5% to $6.7 billion, as widespread decreases were recorded within the sector. Exports of aircraft, engines and parts fell 19.6% on lower volumes.
Exports of automotive products decreased 5.3% to $5.9 billion, largely as a result of exports of passenger autos and chassis, which declined 7.5% to $4.0 billion. Overall, volumes fell 4.7% in July.
Two sectors account for the decline in imports
Imports of energy products declined 12.3% to $3.8 billion, as both volumes and prices fell in July. Petroleum and coal products imports, down 33.5%, accounted for the decrease in the sector.
Imports of machinery and equipment decreased 3.7% to $10.8 billion on lower volumes. The decline in the sector was largely attributed to a 4.7% decrease in imports of other equipment and tools, mainly measuring and controlling instruments as well as air conditioning and refrigeration equipment. Imports of other industrial machinery and office machines and equipment also contributed to the decline in the sector.