Oil, gas exports spark another trade surplus

The country posted backto-back monthly trade surpluses for the first time since September 2014, boosted by higher prices for exports of oil and natural gas in December, Statistics Canada said Tuesday.

But the gain in energy prices hid some troubling weakness in nonenergy exports, economists said.

The overall trade surplus hit $923 million for the final month of 2016 after a surplus the previous month that was revised upward to $1 billion from an initial reading of $526 million.

The result exceeded expectations, as economists had anticipated a surplus of $350 million for December, according to Thomson Reuters.

Jennifer Lee, a senior economist with BMO Capital Markets, said the monthly trade figures have taken on greater significance as of late. “These days, international trade reports are scrutinized, not just for their impact on GDP, but the political ramifications as well,” Lee said in a research note. “Running surpluses will draw unwanted attention (from the U.S.).”

Trade was a key issue for U.S. President Donald Trump’s campaign, during which he said the U.S. needed to take a tougher approach. While Trump has focused much of his attention on his country’s trade relationship with Mexico and China, some have raised concerns that Canada could face collateral damage in a trade dispute.

Canada maintained its trade surplus with the U.S. in December, though it dipped to $4.4 billion from $4.7 billion in November. Exports to the U.S. edged up 0.2 per cent to $34.2 billion in December, while imports from the U.S. increased 1.3 per cent to $29.7 billion.

Overall, exports in December gained 0.8 per cent to a record $46.4 billion due to higher energy product prices. Energy product exports climbed 15.9 per cent to $8.5 billion. Excluding energy products, exports fell 2.1 per cent.