Services deficit grew in September: StatsCan

Canada’s deficit in international services trade widened in September, as imports grew faster than exports, Statistics Canada reports.

The national statistical agency said that the monthly services deficit rose to $624 million in September from $285 million in August. (The deficit for August was revised down from $365 million due to upward revisions in travel exports.)

Overall, services imports increased 5.6% in the month to $11.8 billion, while exports were up 2.7% to $11.2 billion.

The increase in services trade came as the economy continued its reopening, allowing services that had been hampered by public health restrictions to increase activity.

The increase in services trade came as goods trade eased amid ongoing supply chain disruptions.

Total goods imports declined 3.0% in September to $51.1 billion, and exports were down 2.3% to $53.0 billion. With the $1.9-billion surplus in goods trade, the overall trade balance resulted in a $1.2-billion surplus in September, up $10 million from August.

StatsCan noted that the 5.4% increase in imports of commercial services, to $8.2 billion in September, was “entirely due to higher imports of financial services.”

Travel services activity also surged in September, with imports up 17.3% to $1.2 billion and exports up 18.4% to $1.6 billion in the month.

“The growth in travel services for both imports and exports reflected an increase in the number of international travellers following the loosening of Covid-19-related travel and border restrictions,” StatsCan said.

Yet, despite the recent uptick in travel, imports remained 74.2% below their pre-pandemic level, and exports were still down 34.3%, StatsCan said.

On a quarterly basis, services imports increased 8.2% to $33.8 billion in the third quarter, and exports rose 4.1% to $32.8 billion — resulting in a deficit of $1.0 billion for Q3, compared with a $213-million surplus in the second quarter.

Combined with the $4.0-billion surplus in goods trade in Q3, the overall quarterly trade surplus rose to $3.0 billion, up from $1.3 billion in the second quarter.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.