Imports rose sharply in January, more than offsetting a mild increase in exports to push Canada's trade surplus down from $1.7 billion to $116 million in January.
Led by a 16.6 per cent increase in automotive product volumes, imports to Canada rose 5.3 per cent to $37.4 billion in January, Statistics Canada reported Monday. Import volumes have been trending upward since March 2009.
Imports of energy products increased 13.8 per cent to $4.2 billion, the highest level since October 2008. Although prices were up, much of the increase was due to higher volumes.
Imports of crude petroleum rose 12.4 per cent, a third consecutive monthly gain. Imports of petroleum and coal products increased, mostly as a result of higher imports of gasoline.
Total imports of energy products have now reached their highest level since October 2008.
Exports rise nearly $1B
"Overall, the report isn't too negative despite the drop in the surplus," CIBC economist Krishen Rangasamy said in a note. "Two-way trade continues to ramp up in line with the recovering global economy."
On the other side of the ledger, exports rose 0.8 per cent to $37.5 billion in January, following a 7.9 per cent increase the previous month.
Exports of agricultural and fishing products declined 7.2 per cent to $3.2 billion, mostly reflecting lower volumes. Wheat exports fell 15.4 per cent in January, as volumes declined 21 per cent. That followed a large gain in December. Wheat prices have been trending upward since April 2010.
At 6.5 per cent, the growth in imports from the United States outpaced the 3.3 per cent growth in exports, which caused Canada's trade surplus with the United States to decline from $4.3 billion in December to $3.8 billion in January.
After a large gain in December, exports to countries other than the United States fell 5.2 per cent in January. Conversely, imports increased 3.4 per cent. Hence, Canada's trade deficit with countries other than the United States increased from $2.6 billion to $3.6 billion in January.