Imports declined faster than exports during October, Statistics Canada reported today, expanding Canada’s trade surplus.

Lower prices contributed to overall reductions in the value of Canadian imports and exports, the federal government agency said. Imports fell two% to $34.0 billion, while exports edged down 0.5% to $37.4 billion, the third consecutive monthly decrease.

The country’s overall trade surplus expanded to $3.3 billion in October, up from a revised $2.8 billion in September, which was the lowest level since February 1999.

The Canadian dollar’s strength against the U.S. dollar has been reflected in recent trade data. In October, Canada’s trade surplus with the United States narrowed to $6.2 billion — its lowest level since October 2006 — as exports fell more sharply than imports.

The trade deficit with countries other than the United States eased to $2.9 billion. Exports rose and imports fell with all of Canada’s principal trading areas, except for Japan. Exports to countries other than the United States rose 5.6% in October, continuing a strong trend seen throughout 2007.

South of the border, the U.S. trade deficit widened during October, rising higher than expected as the average price for imported oil soared to a record.

The U.S. deficit in international trade of goods and services grew by 1.2% to US$57.82 billion from September’s revised US$57.12 billion, the U.S. Commerce Department said today. The September trade gap was originally reported as US$56.45 billion.

The October deficit exceeded Wall Street expectations. Economists had forecast a US$57.50 billion shortfall.