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“Non-energy exports — every non-energy export sector notched declines in February — was an unambiguously weak spot in the data,” said Brett House, deputy chief economist at Scotiabank. “Overall, a weak print, but in line with expectations based on other major macroeconomic indicators.”

Total exports are still down more than 6 per cent from record highs last July, and the slump is one of the main reasons why Canada’s economy has practically stalled over the past six months. Even with the smaller than expected deficits in January and February, the nation’s trade gap is hovering near historic highs.

All of this is beginning to undermine business sentiment, hampering investment and threatening to spill over into other parts of the economy. Earlier this week, the Bank of Canada warned the recent economic slowdown and global trade tensions were beginning to hamper confidence.

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• Wednesday’s report included revisions that showed better export numbers in nominal terms in January — with a revised 5.3 percent gain that month — followed by a 1.3 per cent drop in February.

• Even as rising oil prices helped export receipts, that key sector too is shipping out less product, in part because of production curtailments imposed by the Alberta government this year. Export volumes of crude oil were down 5.3 per cent in February

• While not as bad as exports, imports too have been sluggish, suggesting the problems in the export sector are part of a broader curtailment of trade flows. In nominal terms, imports were down 1.6 per cent and little changed in volume terms.

With assistance from Erik Hertzberg

Bloomberg.com