OTTAWA — Canada swung to an unexpected trade deficit in February as exports tumbled by the most in nearly a year, dampened by a decrease in shipments of aircraft and canola, data from Statistics Canada showed on Tuesday.

Following three consecutive months of surpluses, February’s $972 million deficit fell short of economists’ expectations for a surplus of $500 million. January was revised down to a surplus of $421 million from the initially reported $807 million.

“That serves as a big blow to optimism that crept into the market via Friday’s January GDP figures,” wrote Scotiabank economist Derek Holt.  “The fact that net trade is so weak again plays against any risk of a bias shift at the BoC this year and more in favour of our view that it will remain on pause for a long time yet.”

The value of exports fell 2.4 per cent, the biggest decrease since March 2016, while volumes were down 2.5 per cent. Overall, exports decreased in eight out of 11 industries. Excluding energy products, exports were down 2.4 per cent.

“This is a disappointing report and appears to wipe out the upside risk to our Q1 GDP call of 3.5%…and could even introduce some downside,” said BMO economist Benjamin Reitzes. “After a huge January for the Canadian economy, it looks as though we could be in for some payback in the February data. Even so, this report is no reason to turn downbeat on Canada, with momentum in so many indicators pointing to strong momentum to start 2017.”

The farm, fishing and food products sector slumped 10.6 per cent, with canola contributing the most to the decline. Exports of aircraft and transportation equipment and parts fell 15.2 per cent, led by a drop in aircraft shipments.

As measured by value, imports rose 0.6 per cent, with volumes up 0.3 per cent.

Imports of motor vehicles and parts jumped 1.8 per cent, led by an increase in passenger cars and light trucks.

© Thomson Reuters 2017