Canada's Trade Deficit Widens

Canada's trade deficit widened to $993 million in January 2009 from $652 million in December 2008, as both exports and imports fell, led by a sharp decline in automotive products trade. Overall exports fell 9.0% to $31.7 billion while imports fell 7.9% to $32.7 billion., Statistics Canada 3/13/2009 6:01:14 AM

Although January's decline in exports was widespread, nearly half was due to automotive products, which fell for a sixth consecutive month. The decrease in overall exports reflected mostly declining volumes. Since July 2008, exports have fallen 28.4% in current dollars, while volumes dropped 19.6% during the same period.

Imports fell in January 2009 due to a combination of volume and price reductions. Lower imports of automotive products and machinery and equipment accounted for nearly three-quarters of the monthly decline in January. Since October 2008, imports have fallen 16.1% in current dollars, while volumes have dropped 14.6% during the same period.

Exports to the United States fell 8.9% to $23.3 billion, largely reflecting drops in automotive products and crude petroleum. This outpaced an 8.4% decrease in imports. As a result, the trade surplus with the United States shrank to $3.0 billion in January 2009 from $3.4 billion in December 2008.

Exports to countries other than the United States dropped 9.3% while imports decreased 7.0%. Consequently, Canada's trade deficit with this group of countries totalled $4.0 billion, virtually unchanged from December.