Canada posts trade surplus of nearly $1B in December

Canada sold $923 million more worth of goods to the world than it bought in return in December, new numbers from Statistics Canada showed Tuesday.

The surplus was better than had been expected. According to a survey by Thomson Reuters, economists had been predicting a more modest surplus of $350 million.

For December, Canadian exports were up0.8 per cent on the strength of higher energy prices.

"Imports increased one per cent, mainly on stronger imports of aircraft and industrial machinery," Statistics Canadasaid.

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In volume terms, exports actually decreased by 1.4 per cent. But higher oil prices made up for that and pushed the overall accountinto surplus territory.

Coming on the heels of another trade surplus in November, that is "back-to-back surpluses totalling just under $2 bln, the most in nearly three years," BMO economist Jennifer Lee said.

Canada hasn't had two consecutive monthly trade surpluses since Sept. 2014.

Canada sold$8.5billion worth of energy products to the world in December, the highest monthly figure since November 2014.

The country's trade surplus with the United States, our biggest trading partner, eased to $4.4 billion December from $4.7 billion in November.Exports to the U.S. edged up 0.2 per cent to $34.2 billion inDecember, while imports from the United States increased 1.3 percent to $29.7 billion.

BMO's Lee said the trade figures have taken on some added meaning lately,in light of President Donald Trump's position that that the U.S. must get tougher with its trading partners. Trump pulled the U.S. out of the Trans-Pacific Partnership, is pushing for a renegotiation of the North American Free Trade Agreement, and has threatened a tariff on imports into the U.S.

"These days, international trade reports are scrutinized, notjust for their impact on GDP, but the political ramifications aswell," Lee said in a research note to clients.

"Running surpluses will draw unwanted attention (from theU.S.)."

For the year as a whole, Canadian exports declined by 0.7 per cent to$521.1billion. Imports, meanwhile, edged down 0.1 per cent to$547.2billion. So on an annual basis, Canada posted a trade deficit of$26.1 billion in 2016, an increase of more than $3 billion from 2015's level.