Advertisement

Sorry shoppers — low loonie lifting costs of goods, trade data shows

"The weaker [Canadian dollar] is having an impact as foreign goods are more expensive." . Credit/Getty Images

OTTAWA – Statistics Canada says the country’s trade deficit with the world increased to $2.5 billion in August as exports fell due to a sharp drop in oil prices.

The gap between what Canada sold abroad versus the value of good brought into the country was wider than expected. Economists had expected a deficit of $1.2 billion for the month, according to Thomson Reuters.

Experts say the economy desperately needs a “rotation” from consumer-led growth to manufacturers and exporters over the next several years as households confront record debt levels.

“Trade took a step back in August,” Nick Exarhos, and economist at CIBC, said.

Rising prices

On the other side of the trade equation, imports of consumer goods increased 2.6 per cent to $10.0 billion.

Story continues below advertisement
Volumes were barely up though, “suggesting that the weaker [Canadian dollar] is having an impact as foreign goods are more expensive,” Benjamin Reitzes, a senior economist at BMO Capital Markets, said.

MORE: Cheaper gas, costlier food and clothes — welcome to your new normal, Canada

The result for August came as exports fell 3.6 per cent in the month to $44 billion, while imports edged up 0.2 per cent to $46.5 billion.

Story continues below advertisement

Exports in the energy sector fell 14.7 per cent to $6.3 billion, due to a 20.9 per cent drop in crude oil and crude bitumen. For the group as a whole, prices fell 16.4 per cent while volumes increased 2.0 per cent.

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

More in, less out

Consumer goods exports dropped 8.0 per cent to $5.9 billion on lower volumes, while metals and non-metallic mineral products fell 9.7% to $4.5 billion.

However, exports of motor vehicles and parts rose 3.1 per cent to $7.8 billion due to a 4.5 per cent increase in exports of passenger cars and light trucks.

In August, exports to the United States fell 3.0 per cent to $33.7 billion while imports from the U.S. slipped 0.8 per cent to $30.8 billion.

Exports to countries other than the United States fell 5.5 per cent to $10.2 billion, while imports from countries other than the U.S. increased 2.2 per cent to $15.6 billion.

Sponsored content

AdChoices