- National Bank Financial senior economist Krishen Rangasamy
Canada's merchandise trade deficit widened in April, as imports hit a record high and exports turned down, a further sign that exporters' woes are weighing on economic growth, Statistics Canada data showed on Tuesday. In April, Canada recorded a $567 million deficit, slightly more than the $550 million shortfall forecast by economists. At the same time, the statistics office revised previous month's initial $24 million surplus to a deficit of $3 million. As the economy registered a 16 straight month of trade deficit, it is expected the persistent strength of domestic currency and weak foreign demand are likely to continue to hold back exports.
The report also showed that exports fell 0.2% to C$40.3 billion in April, with energy falling 1.7%, while crude oil and bitumen shipments tumbled 2%. In the meantime, imports rose 1.2% in April, the fourth consecutive month-on-month advance, and hit a record of $40.84 billion. The volume of imports advanced 1.5% and export volumes climbed 0.5%, while volumes adjusted for price changes are considered as a better indicator of how trade contributes to economic growth. Exports accounts for around 30% of Canada's economy, and a slowdown in exports is raising concerns the economy may struggle to expand at the same pace.
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