Trade deficit balloons to $2.5 billion in August

Statistics Canada says the country's trade deficit with the world increased to $2.5 billion in August — much higher than economists expected.

The increase came as exports fell 3.6 per cent in August, while imports edged up 0.2 per cent.

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

A large part of the widening of the gap was due to energy exports that continued to weaken. Exports of energy products fell by 14.7 per cent, Scotiabank said after the numbers came out. But the bank noted that much of that was because of lower prices — not less energy products going out. In volume terms, energy exports actually increased by two per cent, month over month, the bank noted.

Statistics Canada also updated its reading for July to show a deficit of $817 million compared with its initial reading of a deficit of $593 million.

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.