Trade deficit widens to $3.1b

That was narrower than the $US48.5 billion deficit projected by a Wall Street Journal survey of economists.

Exports fell 3.8% over that period while imports declined 2.2%, reflecting lower oil prices and economic woes overseas.

The bureau also revealed that petroleum imports in August were the lowest since September 2004 and stood at $15.1 billion compared to $14.9 billion 11 years ago.

Yesterday Harper announced he plans to implement a trade pact among a dozen Pacific-rim nations, saying it would lower tariffs on exports and opening up markets for farm and automobile products.

“With a sliding forex and commerce wealth doing OK, it usually has happen to better but imports haven’t delayed down”.

But other goods and auto exports also fell sharply, and the capital goods category rose only because of a spike in aircraft shipments.

Economists had expected a deficit of $1.2 billion for the month, according to Thomson Reuters.

Imports of goods increased $2.5 billion to $192.4 billion, largely due to a $2.1 billion increase in cell phones and other household goods. However, given the strength in exports recorded during previous two months, the Canadian economy is still tracking growth of around 2.5% for the third quarter – above the Bank of Canada’s latest forecast of 1.5% published in July. Yields on USA government debt initially declined after the report was released, before later turning higher as U.S. stock prices were little changed.

In addition to the oil slump, exports of miscellaneous goods and supplies (mostly jewelry, pharmaceutical and medicinal products) also decreased. Providing a few offset, motor vehicle and parts exports were up 3.1%, driven by both volumes and prices.

Canada, America’s largest trading partner, is in a recession.