The rising loonie appears to have fuelled a decline in exports and an increase in imports last September. As a result, Canada's trade balance with the world contracted to its lowest level in almost a decade.
Between January and September of 2007, the dollar appreciated 13 per cent and hit parity by the end of the time period.
According to a Statistics Canada exports declined 2.3 per cent to $37.7 billion in September, the lowest level since October 2006.
Only three sectors -- automotive products, energy products, and other consumer goods -- recorded export gains.
Imports rose 2.2 per cent to $35.1 billion in September. The report says the increase was driven by a demand for energy products, industrial goods and materials, automotive products, and other consumer goods.
Meanwhile, Canada's trade balance with the world fell to its lowest level since December 1998 -- narrowing to $2.6 billion.
The balance of trade shows the difference between the value of the goods and services that a country exports and the value of the goods and services that it imports.
A trade surplus occurs when a country's exports exceed its imports. When the opposite occurs, it is deemed a trade deficit.
Canada's trade surplus with the United States shrank to $6.2 billion in September. Canada's trade deficit with all other countries expanded to $3.5 billion in the same month.
All principal trading areas contributed to the increase except for Japan, as Canada's trade deficit with that country decreased.
With files from The Canadian Press
