- Krishen Rangasamy, senior economist at National Bank of Canada
Canada's trade balance unexpectedly swung to a surplus in September, caused be a plunge in energy imports and an increase in cars and parts exports. According to Statistics Canada, imports declined 1.5%, whereas exports rose 1.1%, despite lower prices for commodity shipments, resulting in a $710 million surplus. August's deficit was revised down to $463 million from the originally reported $610 million. Imports were dragged down by falling energy products, which dropped 19.4%, the most since November 2008. Exports of motor vehicles and parts advanced 6%, recovering from an 11.5% plunge in August, marked by summer maintenance shutdowns. Bank of Canada Governor Stephen Poloz said long-standing weakness in the export sector is one reason the economy is struggling to reach its full potential. Poloz added that headwinds were restraining growth. Exports to the United States, which accounted for 75.1% of all Canadian exports in September, increased by 0.8%, while imports rose by 0.7%. As a result, the trade surplus with the United States expanded to $3.92 billion from $3.86 billion a month earlier.
In the meantime, Canada's trade gap with countries other than the US narrowed to $3.2 billion, as imports plummeted 5.8% and exports climbed 2.1%. One of the biggest boosts to exports was increased trade with the EU.
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