Canada had a deficit of C$1.42 billion ($1.22 billion), the largest in records dating back to 1971, Statistics Canada said today in Ottawa. The figure was almost triple the C$500 million deficit expected in a survey of economists taken by Bloomberg News.
Canada’s run of trade surpluses dating back to 1976 ended in December as prices for crude oil plummeted, and as exports of lumber and cars to the U.S. plunged amid a housing slump and rising unemployment. Bank of Canada Governor Mark Carney has said the global economy will be slow to emerge from the worst slump since the Great Depression in the 1930s.
Imports and exports both fell for a third straight time in May, a month where automobiles and energy accounted for more than half the declines.
Exports fell 6.9 percent to C$28.4 billion in May, and imports fell 3.5 percent to C$29.8 billion. Automobile exports fell 12 percent, led by a 33 percent drop in trucks as production of some models was halted, Statistics Canada said. Energy exports fell 11 percent.
Canada’s trade surplus with the U.S. narrowed to C$1.48 billion in May, from C$2.62 billion in April.
The Canadian dollar strengthened against the U.S. dollar at the fastest monthly pace on record in May, prompting the bank to say on June 4 that it could fully offset” positive economic developments.
Exports will fall 21 percent this year, the government’s export financing agency said yesterday.
Statistics Canada also increased its estimate of the April trade deficit to C$389 million from C$179 million.