"What happened to the recovery we were promised?" you might well be asking as you look at the latest atrocious economic statistics coming out of Ottawa.

Last week, we heard that for a second month in a row the economy wasn't growing. Yesterday, there was slightly more spectacular bad news, as our trade deficit for March fell to the worst level on record. Yes, that is ever. Canada exported $3 billion less stuff than we bought from abroad. It was the sixth monthly decline.

It is well known that bad economic news is bad for political incumbents. It's something Alberta's Jim Prentice has learned to his cost.

Trade train wreck

But as we look around for someone to blame for the latest trade train wreck, the finger points less at politicians and more at energy prices and global currencies. And if you strip out those two effects, the train wreck turns into more of a fender bender.

The evidence is in the detail of yesterday's Statistics Canada report.

The trade figures you see in the headlines are measured in Canadian dollars. So the falling price of energy means that we can export the same amount of oil, for instance, and the figures seem to show that our entire industry is being hollowed out.

For example, exports of refined petroleum fell a startling 30 per cent in a single month. According to Bill Simpkins at the Canadian Fuels Association, part of the reason was that exports of Canadian heating fuel declined sharply in March after an unusually cold winter on the U.S. East Coast.

But the single largest reason for the fall in the dollar value of energy exports overall is the decline in energy prices.

Fancy calculations

There is a second way of measuring exports, and that is what StatsCan calls "volume." It involves some fancy calculations, too complex to explain here, but it is far more detailed than just the cubic metres of goods shipped.

According to Tony Peluso at StatsCan, the volume number is an attempt to estimate how much of each product is being exported or imported independent of its current price.

But the difference between the dollar value of exports and the volume of exports can be dramatic. For the energy sector as a whole, the dollar value of exports fell seven per cent in the month, but the volume of those exports was only down two per cent.

Overall, the total volume of Canadian exports rose 1.9 per cent. Measured in dollar terms, exports were actually down 1.5 per cent.

The other major impact on trade is the relative value of currencies. While the higher U.S. dollar makes our products cheaper in the U.S., the loonie tends to rise and fall in world terms with the U.S. dollar.

Double whammy

That means a higher greenback has a double whammy on Canadian trade figures. A high U.S. dollar weakens U.S. exports to the world — meaning we tend to export less to U.S. exporters.

Meanwhile, a rising U.S. dollar, with the loonie tagging along, means Canadian exports are pricey in non-U.S. countries, and goods produced by those overseas countries are cheap enough for Canadians to buy lots.

The good news for Canadian exports is that both the oil price change and the currency effect will not continue.

Oil prices have actually been rising from their lows, and the biggest American trade deficit in nearly 20 years means the U.S. currency declined yesterday against other global currencies.

And after Prentice's debacle in Alberta, Prime Minister Stephen Harper must be hoping the worst of the economic news is now over, and that Canadians will have a chance to cheer up before the autumn vote.