Canada Posts First Annual Trade Deficit in 34 Years

Canada recorded its first annual trade deficit in 34 years last year amid a global recession and a "calamitous drop" in commodity prices., The Gazette 2/10/2010 10:52:31 AM

The country's trade balance with the rest of the world plunged into the red in 2009, ending the year with a deficit of $4.8 billion — the first annual decline since 1975 — following a $47-billion trade surplus in 2008.

For December alone, the deficit widened more than expected as imports outpaced exports, both driven by the automotive products sector, Statistics Canada reported.

Imports rose 1.8 per cent during the month, while exports increased 1.7 per cent, the federal agency said. That pushed the country's trade deficit to $246 million from a revised $201 million in November, which had originally been estimated at $344 million.

December marked the fifth deficit in six months. Up until December 2008, Canada had not seen a monthly trade deficit in more than 30 years.

Statistics Canada said exports rose for the fourth straight month to $32.2 billion in December from $31.7 billion the previous month. It was the fourth consecutive monthly gain in exports.

Imports rose to $32.4 billion from $31.9 billion in November. "For the second consecutive month, automotive products led the gain, representing more than half the growth in imports in December," the agency said. "Industrial goods and materials and energy products also increased, while machinery and equipment decreased during the month."

Canada Posts First Annual Trade Deficit in 34 Years