Exports of goods were down by CAD 7.8 billion to CAD 144.4 billion in the fourth quarter 2018, after reaching a record CAD 152.2 billion in the third quarter. Energy products accounted for most of the reduction in the value of exports, notably crude petroleum (down CAD 7.5 billion). Crude petroleum prices declined nearly 50% in the last two months of the quarter. Higher exports of natural gas moderated the overall reduction in energy product exports.
Imports of goods were down by CAD 1.5 billion to CAD 151.6 billion in the fourth quarter, as purchases declined by CAD 0.6 billion for energy products, basic and industrial chemical, plastic and rubber products, and motor vehicles and parts. Lower volumes imported were the main contributor to these decreases, except energy product imports, which declined on lower prices.
The trade in services deficit was down CAD 0.2 billion to CAD 6.2 billion in the fourth quarter, led by a higher commercial services surplus.
The gap on trade in goods and services rose by CAD 6.1 billion to CAD 13.4 billion. Exports were down by CAD 7.3 billion to CAD 175.1 billion, mainly on lower sales of energy products. This reflects a sharp decline in energy prices, which were down 22% in the quarter. Imports of goods and services declined by CAD 1.1 billion to CAD 188.5 billion.
The deficit on primary income was reduced by CAD 0.7 billion to CAD 1.5 billion. The deficit on investment income declined by CAD 0.7 billion to CAD 0.9 billion in the fourth quarter. Profits earned by residents on their direct investment abroad increased by CAD 1.2 billion to a record CAD 19.0 billion. Meanwhile, profits earned by non-residents on their direct investment in Canada edged down for a second quarter in a row.
The gap on secondary income remained barelly unchanged at CAD 0.55 billion.
In 2018, the current account deficit narrowed by CAD 1.4 billion to CAD 58.7 billion, the lowest deficit in four years. The trade in goods deficit declined by CAD 3.1 billion, while the investment income deficit increased by CAD 2.3 billion. The current account deficit has now declined for three consecutive years, from a peak of CAD 70.5 billion in 2015.