OTTAWA - Canada's trade deficit in January more than doubled to a near-record $2.45 billion, Statistics Canada said on Friday, amid a slump in oil prices that has crimped the resource-dependent economy.
The deficit - considerably wider than the $1 billion shortfall expected by analysts - was the second highest after the $2.87 billion recorded in July 2012.
Crude prices have recently recovered a little after having dropped by around 50% since June, cutting revenues of major oil-producing nations such as Canada.
Exports fell by 2.8% as the value of energy shipments dropped 14.7%, the eighth consecutive monthly decrease. Export prices shrank by 1.5% and volumes dropped by 1.3%. Overall imports were flat.
"Energy prices retraced some losses in February, so this could be as bad as it get for trade, assuming oil prices don't fall further," BMO Capital Markets economist Benjamin Reitzes said in a note to clients.
The Canadian dollar hit its weakest level in nearly two weeks, trading at $1.2592 to the greenback, or 79.42 U.S. cents. This was softer than Thursday's finish at $1.2506, or 79.96 U.S. cents.
In a sign of the damage done by lower oil prices, energy products accounted for 16.5% of all Canadian exports in January, sharply down from 26.6% in January 2014.
Statscan revised December's deficit to $1.22 billion from an initial $649 million.
Overall exports to the United States, which took 74.5% of all Canadian exports in January, fell 3.1% while imports edged down by 0.1%.
As a result, the trade surplus with the United States almost halved to $1.21 billion from $2.20 billion in December. It was the lowest monthly surplus with the United States since the $1.03 billion recorded in September 1992.
The Bank of Canada on Wednesday kept rates unchanged after a surprise cut in January that it described as insurance against the side-effects of low oil prices.
TD Securities strategist Mazen Issa noted that several sectors reported higher sales in January, including aircraft, autos and industrial machinery.
"We think there are enough silver linings in this report to keep the outlook for the Bank of Canada uncertain," he said in a note to clients.
Separately, Statscan said the value of building permits in January sank by 12.9% - three times more than analysts had expected.