Canada trade deficit widens to Can$3.2 bln

Canada’s trade deficit widened to $3.2 billion (US$2.4 billion) in June as imports and exports rebounded sharply, largely on the strength of auto sales, the government statistical agency said Wednesday.

The deficit — up from Can$1.3 billion in May — was far greater than the Can$540 million deficit economists had forecast, however.

Trade also remained down significantly from pre-pandemic levels, said Statistics Canada.

Imports rose 21.8 percent to $42.9 billion in June. An uptick in car and truck imports represented almost half of the growth in total imports in the month.

Imports of aircraft and other transportation equipment and parts were also up, nearly doubling.

Exports, meanwhile, rose 17.1 percent to Can$39.7 billion in June, marking a second consecutive monthly rises.

Cars and trucks led the sales, while exports of gold, silver and platinum were also up.

Canada’s trade surplus with the United States, meanwhile, narrowed from Can$1.9 billion in May to Can$1.1 billion in June.

“For the moment, the readings on the trade balance will take a back seat to expectations regarding continued progress on two-way trade (with the US),” CIBC analyst Royce Mendes said in a research note.

“However, with US virus cases surging in parts of the country, the outlook for Canada’s exports has become far more precarious.”

amc/ft