Canada lowering dependence on trade with US

Canada's trade deficit narrowed to Can$4.2 billion (US$3.1 billion) in January as commerce with countries other than the United States ramped up, the government statistical agency said Wednesday.

The figure, following a record trade deficit of Can$4.8 billion (revised upward) in the previous month, was higher than economists had expected.

"Overall, the data out today continue to provide a mixed picture of the Canadian economy," said CIBC Capital Markets analyst Royce Mendes.

According to Statistics Canada, exports rose 2.9 percent to Can$47.6 billion in January.

Higher exports of refined gold to Britain and gold transfers to Hong Kong within the banking sector, as well as increased transportation equipment sales to Saudi Arabia, were partially offset by lower exports of soybeans to China, it said.

After five consecutive monthly decreases, energy exports rose in January to Can$7.1 billion. That was driven by a 36.5 percent increase in crude oil exports on the strength of higher prices.

The rebound in export oil prices, however, remained 40.1 percent below a peak in July.

Imports, meanwhile, rose 1.5 percent to Can$51.8 billion, led by a record Can$2.7 billion or 52.6 percent increase in aircraft and parts purchases. That was partially offset by lower energy imports.

Canada's trade surplus with the United States -- its neighbor and largest trading partner -- narrowed for the sixth consecutive month to Can$1.6 billion in January.

After five consecutive monthly declines, exports to the US rose 1.1 percent on the crude oil strength while imports rose 1.8 percent.

Meanwhile, exports to other countries rose 7.9 percent. And imports rose 1.1 percent to Can$19.4 billion, surpassing the previous month's record.

SS