Monthly trade report - December 2024

Highlights

• In December 2024, Canada’s exports of goods and services rose 4.1% (see column “m/m” in Table 1) driven by higher exports of energy, metals, electric vehicles, wheat, and of all service categories.
• Imports of goods and services were up 1.6% month-over-month. Higher goods imports, particularly in consumer goods, offset lower service imports.
• Canadian exports to the U.S. rose on the back of higher energy exports, while imports declined. Meanwhile, exports to markets outside the U.S. grew, albeit at a lower pace than imports from these markets.
• The increases were largely driven by price increases. Export and import volumes grew at 2.6% and 0.2% respectively.
• For 2024 as a whole (“YTD” in the table below), exports of goods and services grew 2.0% while imports rose 2.7% in 2024 compared to 2023.

Table 1: Canada’s trade performance – December 2024

Figure 1: Canada’s monthly trade performance

Industry view - Exports

Export increases were observed in 8 of the 11 product categories for goods, and in all 4 of the service sectors in December. Energy products rose 9.5% month-over-month, leading the growth. This was driven by a 11.0% increase in crude oil exports due to higher prices. For 2024 as a whole, energy exports were 1.2% higher compared to 2023.

Metal and non-metallic mineral products grew 9.2% month-over-month to reach a record high of $10.0 billion in December. Meanwhile, a good harvest of wheat, especially the higher-valued durum variety, led to a 5.8% increase in farm, fishing and intermediate food product exports. Motor vehicles and parts rose 3.9% with electric vehicles driving growth. However, the December gains did not offset a relatively weak year for motor vehicle exports which fell 11.5% in 2024 due to lower Canadian production with several Ontario assembly plants idled or operating under-capacity due to shifting production decisions. The increase in December service exports reversed consecutive declines observed over the past recent months (see Figure 1). Commercial service exports contributed the most to the increase, expanding $79 million (or 0.8%).

On an annual basis, goods exports were up 1.0% in 2024, reversing the decline observed in 2023. This was led by growth in exports of metal and non-metallic mineral products, especially unwrought gold, silver, and platinum group metals. Service exports meanwhile were up 5.5% year-over-year in 2024.

Figure 2: Exports by industry and sector (monthly % change)

Industry view - Imports

Imports increased in 9 of the 11 product categories for goods but in only 1 of the 4 service sectors in December.

Consumer goods contributed the most to the overall gain in imports, rising $640 million (or 4.7%), month-over-month. Meanwhile, the fastest-growing categories were metal and non-metallic mineral products which increased 8.7% and industrial machinery, equipment and parts which rose 5.0%.

Aircraft & other transportation as well as electronic and electrical equipment and parts partially offset the gains in other goods categories as they declined $496 million and $99 million (or 18.1% and 1.3%) respectively in December. In terms of service imports, commercial services recorded the largest month-over-month decline, falling by $125 million, or 1.3%. This was followed by transportation services which dropped $78 million due to lower payments of passenger fares.

For the entire year of 2024, total goods imports rose 1.9% year-over-year, led by consumer goods and farm, fishing and intermediate food products. Meanwhile, service imports were up 5.5% in 2024 compared to 2023.

Statistics Canada continues to caution that the import data may be subject to more significant revisions than usual during the transition to a new data collection approach.

Figure 3: Imports by industry and sector (monthly % change)

Global markets

Continuing the strong momentum observed in November, goods exports to the U.S. rose 5.0% month-over-month in December. This was driven by growth in exports of energy products, as well as higher shipments of precious metals and basic and semi-finished products of non-ferrous metals and alloys to the U.S. In contrast, goods imports from the U.S. declined 1.5%. On an annual basis, goods exports to the U.S. edged down 0.3% while imports rose slightly by 0.8% in 2024 compared to 2023.

Goods exports to countries outside the U.S. grew 4.9% in December, reversing the decline observed in November. Exports to Germany recorded the largest month-over-month increase among all markets outside the U.S. due to higher nuclear fuel and aircraft exports. Elsewhere, there were significant gains in exports of nickel and scrap of metal to Norway, coal and copper to Japan, and aircraft to Switzerland. These increases helped to offset a 9.5% decline in goods exports to China. Meanwhile, goods imports from countries outside the U.S. grew faster than exports, rising 9.0% in December on the back of higher imports from China and the European Union. On an annual basis, goods exports to countries outside the U.S. grew 5.7% while imports rose 3.7% in 2024 compared to 2023.

Figure 4: Goods trade by main markets (monthly % change)

Prices and volumes

The growth in goods export values in December was driven by both prices and volumes, which increased by 2.3% and 2.6% respectively. Import growth was primarily driven by prices, with increases in import prices (2.2%) outpacing increases in import volumes which only edged up 0.2%.

In 2024, annual export growth was mainly driven by prices rather than export volumes as the former rose 0.9% while the latter grew 0.2%. A similar trend was observed in imports, with import prices increasing 1.5% compared to a 0.4% increase in import volumes.

The Canadian dollar experienced a third consecutive month of decline in December. The Canadian dollar fell by 1.9% reaching 70.2 U.S. cents in December, representing the largest monthly decline in 2024. This “boosted” the value of monthly trade statistics, as many import and export transactions are conducted in U.S. dollars and need to be converted to Canadian dollars.

Figure 5: Goods trade (monthly % change in volume and price indices)

Figure 6: Exchange rate & oil prices

What to watch

• On February 4, the U.S. added an additional 10% tariff to all imports from China. A proposed 25% tariff on Canada and Mexico was “paused” for 30 days and linked to Canada and Mexico reinforcing their borders with the U.S.
• The Bank of Canada (BoC) recently modelled a scenario where the U.S. imposes 25% tariffs on all imports and its trading partners fully retaliate. They found that such actions would produce negative economic outcomes for both Canada and the U.S. with higher inflation and lower growth.
• Canada’s GDP growth is estimated to have grown 1.4% in 2024 according to Statistics Canada, as economic activity picked up toward the end of the year. Meanwhile, inflation has been around 2% since August 2024. Noting these developments, the BoC cut rates by another 25 basis points to 3%. The outlook for future monetary policy is clouded by uncertainty surrounding U.S. trade policy.
• The January 2025 IMF forecast predicts that the global economy will grow by 3.3% in both 2025 and 2026. However, they note that divergences in economic performance across different countries are likely to widen, and economic policy uncertainty is elevated.

Next release: March 6, 2025

Table 2: Trade by industry sector – December 2024

Table 3: Goods trade by main markets – December 2024