Fresh data from Statistics Canada showed exports growing by 1.8 per cent to $41.1 billion during the month, but that improvement was overtaken by the 2.1 per cent increase in imports to $39.8 billion.
It was the 20th consecutive monthly trade deficit.
The gap was higher than expected. Also revised higher was July's trade deficit, to $1.2 billion from the previously reported $931 million.
In a recent speech, Bank of Canada deputy governor Tiff Macklem said that Canada's economic growth going forward would need to depend on a rotation from domestic spending on such things as housing to exports.
"The Canadian economy is still waiting for that growth rotation into exports," Bank of Montreal chief economist Doug Porter said of the latest report.
"And given the U.S. government shutdown and the deepening uncertainty over the fast-approaching debt ceiling, no one is holding their breath in anticipation of a quick revival on that front."
Exporters received some more bad news Tuesday as the International Monetary Fund downgraded expectations for global growth by two-tenths of a point this year and next to 2.9 per cent and 3.6 respectively.
Canadian exporters not only benefit from a strong global and U.S. economies in terms of greater demand for their products, but also to boost the value of shipments of oil, gas and minerals.
The encouraging element in the report was that exports did pick up moderately by 1.8 per cent, reversing the 1.7 per cent dip in July. But that was more than offset by the hike in imports.
With September numbers still to come, trade is on track to exert a weighty drag on gross domestic product growth in the third quarter, most analysts said.
Last week, the central bank sharply revised downward it's third-quarter forecast of 3.8 per cent growth to between two per cent and 2.5 per cent, where most economists now stand.
The August data showed the big export movers were energy products and metal and non-metallic minerals.
Exports to the United States increased 1.9 per cent to $30.1 billion, while imports from the United States edged up 0.1 per cent to $26.1 billion, pushing the trade surplus with the United States to $4 billion from $3.4 billion in July.
Imports from countries other than the United States rose 5.8 per cent to $14.9 billion, while exports to these countries increased 1.6 per cent to $9.7 billion.
The trade deficit with countries other than the United States widened to $5.3 billion from $4.6 billion in July.