Canada’s international merchandise trade deficit saw a significant improvement in December, with exports outpacing imports and the country’s reliance on the United States market decreasing. According to data released by Statistics Canada, the trade deficit narrowed to C$1.31 billion in December, compared to a revised C$2.59 billion deficit in November.
Total exports rose by 2.6% to C$65.63 billion, driven primarily by a surge in metals and non-metallic mineral products shipments, which grew by 18% during the month. Notably, exports of unwrought gold saw a substantial increase of over 37%, supported by higher prices in the international market. However, excluding the metals and non-metallic category, Canadian exports experienced a slight decline of 0.2%. In terms of volume, total exports increased by 1.4%.
On the import side, there was a 0.6% increase to C$66.93 billion, with notable rises in imports of gold, passenger vehicles, and energy products. Six out of eleven product sections registered an increase in imports during the month.
Trade with the United States, Canada’s largest trading partner, showed a slight improvement as exports to the US rose by 1.1%. However, the share of exports to the US decreased to just over 67.4% of total exports, down from 76.2% a year ago. This marks the lowest level of exports to the US since data collection began, excluding the pandemic months in 2020. Imports from the US increased by 3.5%, narrowing Canada’s merchandise trade surplus with its southern neighbor to C$5.7 billion.
Meanwhile, exports to countries other than the US reached an all-time high in December, with exports of gold to the United Kingdom leading the gains. Conversely, imports from countries other than the US fell by 3%, resulting in a narrowing of Canada’s trade deficit with these countries to $7 billion in December from $9 billion in November.
Overall, the December trade data reflects a positive trend for Canada’s international trade, with a notable shift in the country’s export destinations and product categories. The diversification of Canada’s trade partners and products is crucial for ensuring a resilient and sustainable trade balance in the long term.
