Trade gap widens as dollar grows

OTTAWA — The rapid rise of the Canadian loonie is being held responsible for Canada’s trade balance with the world sinking to its lowest level since in nearly 10 years.

According to Stats Canada, exports decreased 2.3 percent to $37.7 billion in Sept., the lowest level since October 2006. Only three sectors — automotive products, energy products, and other consumer goods — recorded gains.

Meanwhile, imports rose 2.2 percent to $35.1 billion, recapturing some of the loss registered in August. Energy products were by far the prime force behind the rise, followed by industrial goods and materials, automotive products, and other consumer goods.

With imports rising and exports falling, the nation’s trade balance with the world narrowed to $2.6 billion, falling to its lowest level since December 1998. The trade surplus with the United States shrank to $6.2 billion.

Sharp declines in exports of machinery and equipment (tumbled 7.2% to $7.6 billion), and industrial goods and materials, the two most important sectors in terms of value, overshadowed gains in automotive products, energy products, and other consumer goods. Aircraft and other transportation equipment were solely responsible for the declines, plummeting 31.5 percent to $1.4 billion.

Forestry products fell 7.4 percent to $2.2 billion, the sixth consecutive monthly drop, while exports of agricultural and fishing products declined 3.6 percent.

However, the volatile automotive products sector, was back up again, climbing 2.3 percent to $6.3 billion — slightly above levels recorded a year ago.

Energy products fuel imports:

Imports recovered somewhat in Sept. from the declines observed in August, as the Canadian dollar continued to gain ground. Higher imports of energy products, industrial goods and materials, automotive products, and other consumer goods more than compensated for the declines registered by the three remaining sectors.

Energy products led the expansion, soaring 13.5 percent to $3.4 billion, their highest level in 2007, and just shy of the record high achieved in August 2006. Petroleum and coal products, crude petroleum, and to a lesser extent coal and other related products, drove the increase.