Canada's trade deficit narrowed to $1.1B in November
Rail strike leads to fewer imports and exports, skewing numbers
The gap between what Canada ships out to the rest of the world and what it brings in narrowed to $1.1 billion in November, Statistics Canada reported Tuesday.
Canada's economy exported $48.7 billion during the month, a decline of 1.4 per cent, while imports came in slightly higher at $49.8 billion — but still a decline of 2.4 per cent from October's level.
A big reason why both numbers declined was an eight-day strike by rail workers during the month, a disruption that wreaked havoc with supply chains both in and out of the country.
The disruption made the month the worst November for Canadian exports by rail since 2013, the data agency said, and total exports fell to their lowest level since February. Economists note that big drop likely means that backlog of products waiting to be shipped means the numbers are likely to bounce back when the next month's are reported.
"Some solace can be taken in the fact that the strike ended in late November," TD Bank economist Rishi Sondhi said. "This could make the December data look better."
As is often the case, most of Canada's trade deficit can be attributed to a large trade surplus with the United States, while the country consistently buys more from the rest of the world than it sells
Canadian imports from places like China and Mexico fell by 4.7 per cent, but that was offset by higher exports to other countries, including a record number of nearly $2.3 billion to the United Kingdom during the month. As such, Canada's trade deficit with the rest of the world shrank to $5.3 billion during the month.
And the country's trade surplus with the U.S. got smaller too, from $5.1 billion in October to $4.2 billion in November.