Economy hits pothole as Canada posts surprise trade deficit for February

Canada posts surprise $972M trade deficit

OTTAWA — Canada’s economy hit a pothole in February, as an unexpected trade deficit broke up a series of recent positive surprises.

The country ran a $972-million trade deficit in February, following three consecutive monthly surpluses, Statistics Canada reported Tuesday.

Economists had generally expected another surplus — about $500 million, according to Thomson Reuters.

“After a huge January for the Canadian economy, it looks as though we could be in for some payback in the February data,” senior economist Benjamin Reitzes wrote in a BMO Capital Markets comment.

“Even so, this report is no reason to turn downbeat on Canada, with momentum in so many indicators pointing to strong momentum to start 2017.”

Canada’s trade surplus with the United States increased to $4.5 billion in February from $4.4 billion in January. That was offset by a higher trade deficit with other countries. It grew to $5.4 billion for February from $4.0 billion in January.

The run of stronger-than-expected data for January had prompted some observers to upgrade their expectations for Canada’s economic growth in the first quarter.

However, Bank of Canada governor Stephen Poloz has remained cautious about how the economy is faring, noting that he’s seen good data disappear in the past.

The Bank of Canada is expected to update its economic forecast next week when it releases its monetary policy report and interest rate announcement.

In its business outlook survey released by the central bank on Monday, it noted signs of strengthening domestic demand following overall subdued activity over the past two years.

Canada’s exports in February slipped 2.4 per cent to $45.3 billion after reaching a record high in January. The decline included a 10.6 per cent drop in farm, fishing and intermediate food products as well as a 15.2 per cent fall in the export of aircraft and other transportation equipment and parts.

Imports gained 0.6 per cent to $46.3 billion, with motor vehicles and parts rising 1.8 per cent to $9.1 billion — the highest that’s been since the record high set last August.

Nathan Janzen, senior economist at Royal Bank, said the pull-back in export volumes in February provide first evidence that the recent outsized gains in GDP came to an end in February.

“Looking through monthly and quarterly data volatility, our view remains that underlying economic activity continues to improve at a modestly above-potential pace as weakness in oil and gas sector investment eases and the rest of the economy continues to grow,” Janzen wrote in a report.

Craig Wong, The Canadian Press

Just Posted

RDN seeks guidance for Area F projects

Five-year Project Plan to be updated

UPDATED: Remains of two people found in Ucluelet

Officials have not said whether or not the remains belong to Ryan Daley or Dan Archbald

B.C. turns up the heat

Environment Canada has issued a special weather statement for most the province due to high temperatures

RDN to create conceptual designs for fire halls

Committee endorses standardization design of buildings

UPDATE: Oceanside RCMP say teen has been located

Police asked for public assistance last week while looking for Isaiah Taylor

VIDEO: Seaside Cruizers Show and Shine in Parksville Qualicum Beach

Hot rods, American muscle and more featured June 15-17

Coastal Community expands wealth services presence in Qualicum Beach

New offices are located in heart of Qualicum Beach’s business district

Cheers erupt as Federal Court judge approves historic gay purge settlement

Gay military veterans said they were interrogated, harassed and spied on because of their sexuality

Helping B.C.’s helpers cope

The MRT has helped almost 7,000 first responders and street workers in 57 communities in B.C.

Border officials argue B.C. man’s Facebook posts threat to Canada’s security

A B.C. Supreme Court judge acquitted Othman Hamdan of terrorism charges last September

Reena Virk’s mother has died

Both of Virk’s parents became activists against bullying in wake of daughter’s death

Search for capsized fishers near Tofino enters fourth day

“There’s a lot of shock in the community in terms of how we could end up at this place.”

B.C. announces $75M to help friends, family care for seniors at home

Funding will go towards respite care and adult day programs

Timely tide attracts another pod of orcas to Victoria

The pod left the harbour about 30 minutes later

Most Read