OTTAWA, Ont. — Canada’s merchandise exports to the world hit a record annual high in 2006, despite the first decline in exports to the U.S. in three years.

In total, Canadian companies exported nearly $458.2 billion worth of merchandise abroad last year, a 1.1% gain from 2005, Statistics Canada revealed.

However, imports rose nearly four times as fast, up 4.2% to $404.5 billion, which was also a record high. As a result, Canada’s annual merchandise trade balance with the world fell by more than $11.2 billion to $53.6 billion, its lowest level since 1999.

Overall, export receipts were up for agricultural products, machinery and equipment and industrial goods last year. This was due primarily to exporters receiving higher metals prices and finding new markets for wheat, canola and aerospace products. Imports rose in all major sectors in 2006.

Canada’s exports to the U.S. fell 2% last year, largely because of weakness in the automobile and forestry industries. Exports in the auto industry, primarily to the U.S., slumped 6.0% from 2005, while forestry exports were down 8.6%. Imports from the U.S. were up 1.9%.

The U.S., still Canada’s largest export market, accounted for 79% of exports in 2006, down from 81% the year before. Canada’s trade surplus with the U.S. amounted to $96.5 billion, the lowest value since 2003.

Exports to countries other than the U.S. amounted to $96.9 billion, up 15% last year over the previous high in 2005. Imports from these countries rose a strong 8.8%, but were outpaced by exports.

China remained Canada’s second largest source of imports and fourth-largest destination for exports in 2006. Exports grew by 7.8% to $7.7 billion while import values increased by 17% to $34.4 billion.