Lower oil prices weaken Canadian trade balance

OTTAWA — Canada’s trade balance with the world fell to $1.3 billion in November from a revised $2.3 billion in October as both exports and imports declined.

According to Stats Canada, over two-thirds of the drop in exports (-6.8% — the lowest total for exports since January 2008), and almost all the decrease in imports were due to energy products, as crude petroleum prices continued to fall.

Excluding energy products, exports declined only 2.7 percent while imports increased 0.6 percent.

The trade balance has been in deficit since July 2007.

Exports to the U.S. continue their freefall (-7.4%) due to our southern neighbors’ worsening economy. The decrease in exports outpaced a 3.7 percent drop in imports, putting Canada’s trade surplus with the United States at $4.5 billion, its lowest level since May 1999.

Imports from countries also declined 6.6 percent, while exports fell an even 5 percent.

Overall, energy exports dropped 19.4 percent to $8.4 billion, the fifth consecutive monthly decrease in this sector. The decrease mostly reflected a 15 percent decline in prices, while volumes were also down 5.1 percent.

Industrial goods and materials declined 7.4 percent and decreased demand in the U.S. led to a decline in exports of copper and alloys, which fell for the fourth consecutive month. Growth in exports of fertilizer partially offset the sector’s decline, says Statscan.

Exports of machinery and equipment rose slightly by 1.4 thanks to aircraft and other transportation equipment, which grew 11.9 percent.

Again, energy declines also affected imports. The main contributor to this decrease was crude petroleum, where volumes fell 34.9 percent, in part due to refinery maintenance.

Automotive products imports continued to decline, falling 4.5 percent to $5.8 billion in November.