The gap between what Canada sells to the rest of the world and what it buys shrank to a gap of about $3 billion in July, as imports fell by more than exports did.

Statistics Canada reported Wednesday that fell 6 per cent and exports decreased 4.9 per cent, "both due mainly to the effect of widespread price decreases."

Canada imported $47.2 billion worth of goods and services in June, the first decline since last year.

Exports, meanwhile, fell to $44.1 billion, leaving a trade deficit of just over $3 billion.

Canada's trade deficit with the U.S. widened from $1.8 billion in June to $2.9 billion in July. With the rest of the world, however, Canada posted a large trade surplus, expanding from $5.6 billion in June to $5.9 billion in July.

While encouraged by the smaller deficit, BMO economist Benjamin Reitzes called it "still-sizeable" but suggested that a rebounding oil price could make it shrink even more soon.