Canada’s trade deficit widens more than anticipated in April

Statistics Canada announced on Thursday that Canada’s merchandise trade deficit stood at CAD3.25 billion in April, widening from a revised CAD1.53 billion gap in March (originally a CAD1.41-billion gap). That was the largest trade gap since February 2019.

Economists had expected a deficit of CAD2.36 billion.

According to the report, the country’s both imports and exports decreased drastically, due to production shutdowns in a number of manufacturing industries, falling energy product prices, the closure of many retail stores, and weaker demand due to physical distancing measures related to the COVID-19 pandemic.

Canada’s exports tumbled 29.7 percent m-o-m to $32.66 billion in April, the lowest level since January 2010, driven by lower exports of motor vehicles and parts (-82.9 percent m-o-m, the largest decline ever observed), energy products (-43.6 percent m-o-m, the largest decrease on record) and consumer goods (-14.5 percent m-o-m).

Meanwhile, imports plunged 25.1 percent m-o-m to $35.91 billion in April, a level not observed since February 2011, driven by declines in imports of motor vehicles and parts (-77.1 percent m-o-m, another unprecedented decline), energy products (-53.6 percent m-o-m) and consumer goods (-11.6 percent m-o-m, the largest decrease since 1988).