Trade deficit widens to $2.5B

Canada's trade deficit with the world rose to $2.5 billion in September from $1.5 billion in August as merchandise exports fell and imports rose.

Statistics Canada said Wednesday thatmerchandise exports declined 1.7 per cent to $33.1 billion in September, while export volumes fell 2.2 per cent and prices increased 0.5 per cent.

Imports increased 1.2 per centto $35.6 billion, the highest level since November 2008. Prices rose 1.1 per cent.

Canada's exports have remained relatively flat through 2010, the data agency said. The trade deficit is now approaching the all-timerecord it set in July.

Automotive products, industrial goods and materials an other consumer goods were the main factors behind the decline.

Lower exports of cars to the United States pushed total exports to the United Statesdown 3.6 per centto $23.9 billion, their lowest level since November 2009. In contrast, imports increased 1.6 per cent. As a result, Canada's trade surplus with the United States narrowed to $1.6 billion in September from $2.9 billion in August.

Exports to countries other than the United States increased 3.6 per cent, the third consecutive monthly gain, while imports rose 0.5 per cent. Consequently, Canada's trade deficit with countries other than the United States declined to $4.1 billion in September from $4.3 billion in August.