An 8.3% increase in imports overshadowed a 3.3% increase in exports, pushing Canada into a $1.4 billion trade deficit in July, Statistics Canada reported Thursday.
Imports rose to $31.7 billion while exports increased to $30.3 billion, erasing a $37 million trade surplus in June.
Import gains halted four consecutive months of declines due to an 8.7% increase in trade volumes as prices edged down 0.4%. Machinery and equipment, automotive products and energy products were the main sources of growth.
The second consecutive monthly increase in exports was due to a 5.9% increase in trade volumes as prices declined 2.4%. Increased exports of machinery and equipment and automotive products led to the increase in overall exports while declines in energy exports tempered the gain.
Canada's trade surplus with the U.S. shrank to $1.9 billion in July from $3.2 billion in June as the growth in imports outpaced increased exports. U.S. imports rose 9.9% as a result of higher imports of organic chemicals and aircraft.
Imports and exports to countries other than the U.S. rose 5.7% and the trade deficit with this group of countries grew to $3.4 billion in July from $3.2 billion in June.