Trade deficit nearly doubles to $644 million as oil exports tank

The gap between how much Canada buys from the rest of the world and how much it sells widened to $644 million from $327 million in November, Statistics Canada reported Wednesday.

Economists had been expecting the figure to be about half that.

Exports declined by 3.5 per cent to $43.3 billion, the lowest level since April. Imports, meanwhile, also fell to $43.9 billion, the lowest level since July.

Both figures were down in volume and dollar terms, so it's not just a case of Canada getting less money for what it sells, such as oil, Scotiabank noted in a commentary.

"Unsurprisingly, exports of energy products are the largest downward drag, with a sixth consecutive monthly drop," the bank said. "Crude oil exports dropped 9.9 per cent along with a 6.7 per cent drop in prices and a 3.4 per cent drop in volumes. Total energy exports fell 7.8 per cent."

Energy wasn't the only story, however, as nine out of 11 export sectors that the data agency tracks shrank. Only two sectors improved, agriculture, up 8.2 per cent, and forestry products expanded by 4.8 per cent.

The data agency also revised its initial October report of a $99 million surplus to a $327 million deficit, which means the data for the fourth quarter of 2014 as a whole is likely to be the weakest of the year.

"The trade deficit is likely to worsen materially due to the steep drop in energy prices, suggesting it will be some time before we see another surplus," BMO said in a note.