OTTAWA - Canada's trade gap unexpectedly widened to a record deficit in June as imports of motor vehicles and parts jumped, while the increase in exports was lackluster, data from Statistics Canada showed on Friday.
The $3.63 billion deficit was greater than the $2.82 billion that economists had expected. Exports were up just 0.6 per cent in June, but that was largely due to a jump in prices, with volumes down 1.4 per cent.
Overall exports were lifted by a 7.2 increase for energy products as prices for crude oil and bitumen rose. But excluding energy products, exports were down 0.4 per cent.
In the second quarter, exports tumbled 4.7 per cent, the largest decline since the second quarter of 2009. After a strong start to the year, economists expect this drop, along with the disruption to oil production caused by wildfires in northern Alberta, to weigh on economic growth data for the second quarter and keep the Bank of Canada on the sidelines.
“While we still believe the BoC is likely to stay on the sidelines for a prolonged period (even if the Fed resumes tightening), the ugly export trend keep the slim chances of BoC easing alive,” BMO Capital Markets Chief Economist Doug Porter wrote in a note to clients.
Imports rose 0.8 per cent in June, led by record levels of motor vehicles and parts. Overall volumes were up 0.7 per cent.
Canada's trade surplus with the United States, its largest trading partner, narrowed to $1.81 billion as imports from south of the border rose 1.5 per cent.
Still, higher exports to other countries, including the United Kingdom and Spain, helped narrow Canada's trade deficit with nations other than the United States to $5.44 billion