Trade Deficit in Canada is First Annual Shortfall Since 1975

For the first time since 1975, Canada has experienced an annual trade deficit shortfall, as merchandise exports plunged on a stronger Canadian dollar and lower demand in the United States, the largest trading partner of Canada.

Sales of automobiles were the major culprit in relationship to product sales, as the deficit for December came in at $231 million, with analysts looking for a deficit at around C$100 million for the month.

The trade surplus between Canada and the United States increased in December from C$3.7 billion to C$3.4 billion, according to Statistics Canada.

“Over the course of 2010 we expect it to be the case that net exports will be a small drag on growth,” said Paul Ferley, economist at Royal Bank of Canada.
 
Automobile imports increased by 6 percent to bring the overall import total to C$32.4 billion, a 1.8 percent increase. Imports from the energy sector rose by 5.4 percent, while industrial products imported grew by about 3 percent. Exports for December only managed to increase by 1.7 percent to C$32.2 billion.