Canadian merchandise trade deficit balloons to $2.1 billion

Exports fell almost 3% in November, mainly as a result of lower crude oil deliveries

Mario ToneguzziCanada’s merchandise trade deficit with the rest of the world widened from $851 million in October to $2.1 billion in November, according to data released on Tuesday by Statistics Canada.

The federal agency said that was due to exports falling by 2.9 per cent in November, mainly on lower crude oil exports, while imports decreased by 0.5 per cent.

For exports, it was a fourth consecutive monthly decline, as they fell to $48.3 billion.

“Export volumes were down 1.8 per cent while prices fell 1.1 per cent. Exports were down in eight of 11 sections in November and, as was the case in October, energy products contributed the most to the decline. Exports excluding energy products decreased 1.4 per cent,” said StatsCan.

“Following a 6.7 per cent decline in October, exports of energy products fell 9.2 per cent to $8.4 billion in November. Crude oil exports (-17.7 per cent) led the decrease, driven by a 13.9 per cent drop in prices, which were down for a third consecutive month. Crude oil export volumes were down 4.4 per cent in November. Lower exports of crude oil were partially offset by higher exports of coal to South Korea, China and Viet Nam.”

It said exports to the United States fell 3.9 per cent in November to $35.3 billion, mostly due to lower crude oil exports. Imports were down 0.3 per cent to $33.2 billion. As a result, Canada’s trade surplus with the United States narrowed from $3.5 billion in October to $2.2 billion in November, the smallest surplus since September 2017. Comparing the average monthly exchange rates, the Canadian dollar lost 1.1 US cents relative to the American dollar from October to November.

The federal agency said total imports declined 0.5 per cent to $50.4 billion in November. Imports were down in seven of 11 product sections, led by motor vehicles and parts. Import volumes fell 0.3 per cent and prices edged down 0.1 per cent, it said.

“Imports of motor vehicles and parts decreased 2.8 per cent to $8.9 billion in November. Lower imports of passenger cars and light trucks, which fell 5.5 per cent to $3.7 billion, were mainly responsible for the decline in November. This was the ninth decrease in 12 months, with imports of passenger cars and light trucks down 13.9 per cent compared with November 2017. This decrease coincided with lower demand for new motor vehicles in Canada in recent months,” added Statistics Canada.

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