Canada's global trade deficit in goods and services grew by $15 billion last year over 2011, Statistics Canada reported Thursday.
And the deficit remained at "near-record" levels in the fourth quarter, for a third straight period despite falling by $800 million to $17.3 billion.
StatsCan said a $2.3 billion reduction in the goods deficit was partly offset by an increase in the investment income deficit.
Exports of energy and farm, fishing and intermediate food products rose, while imports fell, led by industrial machinery and motor vehicles.
The deficit on investment income increased by $1.8 billion, primarily the result of increased outflow of earnings to non-residents on their direct investments in Canada.
The current account includes Canada’s trade in goods and services but excludes transactions in financial assets.
BMO Capital Markets economist Benjamin Reitzes’s analysis suggests the deficit was about 3.9 per cent of GDP, or the second widest since 1981. He predicted the gap would remain sizeable through 2013, as the U.S. economy only picks up steam slowly and fiscal uncertainty remains.
Loonie said still too high
"If the recent weakness in the Canadian dollar persists, that could provide some assistance, but at current levels, the loonie remains overvalued," Reitzes said.
The Canadian dollar, whch has lost about three US cents over February amid signs of a softening economy, closed down 0.79 of a cent at 96.96 cents US.
"Canada has been in a sustained current account deficit position for four years now, as a relatively stronger domestic economy pulls in imports, while a softer global demand backdrop hinders our exports," TD economist Leslie Preston said in a commentary.
"We do not expect a return to surplus over the next couple of years, but the deficit should continue to narrow as global growth improves and demand for Canada's exports picks up, particularly as the U.S. economy gains momentum," Preston said.
"However, one sore point … was the decline in imports, particularly in industrial equipment, which is a disheartening sign for the Canadian economy," she added.
The goods surplus with the United States was up $2 billion on stronger exports in the fourth quarter, although the surplus with Canada's biggest trading partner for the full 2012 year was down $6.8 billion to $42.1 billion.
The deficit on trade in services was reduced by $100 million in the fourth quarter from a high of $6.2 billion the previous quarter, although for 2012 as a whole this deficit reached a new high at $24.6 billion, mostly on the travel account.