Statistics Canada said Tuesday the country saw a merchandise trade surplus of $2.6 billion for January compared with a revised deficit of $1.6 billion in December.
BMO economist Shelly Kaushik said exports were supported by rising energy prices, which partially offset weakness in auto production from ongoing supply chain disruptions.
“Widespread inflation continues to play a role as export and import volumes were weaker than the headlines,” Kaushik wrote in a report.
“Looking ahead, we expect red-hot energy prices will continue to buoy exports, with minimal direct impact expected from the sanctions against Russia.”
In real or volume terms, total imports fell 8.5 percent in January, while exports posted a 4.6 percent drop by volume.
The swing back into surplus after the deficit to end 2021 came as total imports fell 7.4 percent to $54 billion.
Car parts down
Imports of motor vehicles and parts dropped 13.9 percent in January as imports of passenger cars and light trucks fell 12.4 percent. Imports of engines and parts decreased 15.4 percent.
Meanwhile, total exports edged down 0.2 percent to $56.6 billion as exports of motor vehicles and parts fell 9.6 percent. Excluding energy products, exports fell 2.7 percent.
Regionally, Statistics Canada said the move back to a trade surplus came as the country posted its largest surplus with the United States since July 2008. Canada’s trade surplus with its largest trading partner came it at $9.3 billion for January compared with $7.1 billion in December.
Meanwhile, Canada’s trade deficit with countries other than the United States narrowed to $6.7 billion in January compared with $8.6 billion in December.
On the services side of the equation, Canada’s monthly international trade in services deficit increased to $314 million in January compared with $172 million in December.
Exports of services fell 4.0 percent to $11.6 billion, while imports dropped 2.8 percent to $11.9 billion.
Canada’s combined trade in goods and services resulted in a surplus of $2.3 billion in January compared with a deficit of $1.8 billion in December.