Trade surplus hits $175M in April

Canadian exports declined less than imports did in April, moving the country's trade balance to a $175-million surplus from a $236-million deficit the month before.

Statistics Canada said lower prices pushed imports down 2.2 per cent, while exports were only down one per cent. Prices were down, but volumes were up on both sides, the third straight month that has happened.

The figure was weaker than what economists were expecting, but likely held back by a rising loonie.

Exports decreased from $33.3 billion in March to $32.9 billion in April, the second consecutive monthly decline. Industrial goods and materials made up much of the decline.

Following two months of growth, imports declined from $33.5 billion in March to $32.8 billion in April. Again, industrial goods and materials contributed to the decline.

Interestingly, consumer good imports declined 6.1 per cent in April, despite the loonie's move above parity for the first time since mid-2008, BMO economist Robert Kavcic said.

"Still, despite a small setback in April, the fact that trade volumes continue to move up sharply off their recession lows is good news for the Canadian economy," he said in a note Thursday.

U.S. impact

With the United States alone, exports rose 0.7 per cent while imports grew 0.9 per cent. As a result, Canada's trade surplus with the United States remained at $3.8 billion in April.

With the rest of the world, Canada's exports fell 5.5 per cent, while imports dropped by seven per cent. Because of that, Canada's trade deficit with countries other than the United States narrowed to $3.6 billion in April from $4 billion in March. 

Despite the move toward a trade surplus for the month, not all economists were impressed with Canada's trade performance.

'Our wagon is still hitched to the U.S. in terms of trade' —Scotiabank's Derek Holt

"For a county that considers itself a major trading nation, the trend lines for Canadian trade are uncomfortable," said the Conference Board of Canada's chief economist, Glen Hodgson.

Total Canadian exports fell 14 per cent in 2009, he noted in a report Thursday.

Others pointed to bleak economic trade data from Canada's largest trading partner, the U.S, as reason for concern. America's trade gap grew 0.6 per cent to $40.3 billion — the most since December 2008, the Commerce Department said Thursday — on declining imports and exports.

"Our wagon is still hitched to the U.S. in term of trade exposure," Scotia Capital economist Derek Holt said.

Despite gains with trade to Europe and Asia in recent years, the United States is still the buyer of 72 per cent of Canadian exports.