Canada Trade Deficit Hits Record High In July, 2012

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A cargo ship loaded with cargo containers bound for the Vancouver port makes its way under the Lions Gate bridge April 29, 2009. Canada’s trade deficit with the rest of the world rose to an all-time record high in July, Statistics Canada data shows. (John Lehmann/Globe and Mail)
A cargo ship loaded with cargo containers bound for the Vancouver port makes its way under the Lions Gate bridge April 29, 2009. Canada’s trade deficit with the rest of the world rose to an all-time record high in July, Statistics Canada data shows. (John Lehmann/Globe and Mail)

Canada’s trade deficit with the rest of the world rose to an all-time record high in July, Statistics Canada data shows.

Canada bought $2.3 billion more from foreign countries than it sold to them in July, as exports fell 3.4 per cent from the previous month. Imports also fell, but by a smaller 2.2. per cent, meaning the overall trade deficit grew wider.

The trend went against analysts’ predictions, who expected a slight narrowing of the deficit.

"It’s never encouraging to see a deteriorating trade balance, but it’s really bad news when the worsening is sparked by falling two-way trade," CIBC analyst Emanuella Enenajor said in a client note Tuesday morning.

TD Bank economist Leslie Preston suggested the weak number for energy exports — they fell 8.5 per cent during the month — are a little "suspicious," and predicted a bounce-back in August.

"However, that does not account for the weakness seen in other non-energy categories. There is really little to be positive about in today’s report," Preston wrote.

Exports to the United States fell 5.0 per cent to $27.4 billion in July, while imports declined 2.1 per cent to $25.3 billion.

The trade surplus with the United States decreased to $2.1 billion in July from $3 billion in June, the smallest surplus since October 2010.

Imports from countries other than the United States decreased 2.4 per cent to $14.7 billion in July while exports rose 1.2 per cent to $10.3 billion leaving the trade deficit at $4.4 billion, down from $4.9 billion in June.

With files from The Canadian Press

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