A Single Vessel Is Behind Canada's Largest-Ever Trade Deficit
Canada posted its largest trade deficit on record in September, a whopping C$4.1 billion ($3 billion) — and a single piece of equipment is to blame.
A heavy-load carrier arrived at Bull Arm, Trinity Bay in Newfoundland on Sept. 2, after a voyage from South Korea that began in June.
You'll note that the 224.8 meter-long vessel had to sail around Africa rather than go through the Suez Canal, due to its size and cargo.
The Blue Marlin, as the vessel is known, was carrying a 30,000 tonne utilities and process module made by Hyundai Heavy Industries. The module, which had been under development since 2013, will be used in the Hebron offshore-oil project off the coast of Newfoundland and Labrador.
Exxon Mobil Corp. has the largest interest in this project; co-venturers include Chevron Corp., Suncor Energy Inc., Statoil ASA, and Nalcor Energy Corp. The field has been estimated to contain more than 700 million barrels of recoverable resources.
The arrival of this module helped push the imports of industrial machinery, equipment and parts up by C$2.9-billion in September, according to Statistics Canada, meaning the nation's trade deficit excluding this increase would have totaled C$1.2 billion for the month — an even smaller gap than the C$1.7 billion deficit that economists had been estimating.
"With capital spending being the primary soft spot for the Canadian outlook over the past two years, we’ll take a positive data point where we can find on that line item," writes CIBC World Markets Economist Nick Exarhos.