FX.co ★ Canada’s Trade Gap Narrows in December, Signaling Easing External Imbalances

Canada’s trade deficit narrowed notably in December 2025, with the balance improving to -1.31 billion Canadian dollars from a revised -2.59 billion dollars in November 2025. The latest data, updated on 19 February 2026, point to a moderation in Canada’s external imbalances at the close of the year.

While the country remained in deficit, the sharp month‑over‑month improvement suggests either stronger export performance, softer import demand, or a combination of both during December. This shift could reflect changing global demand conditions, currency movements, or timing effects in key sectors such as energy, manufacturing, and commodities.

The December reading brings some relief after November’s wider gap and will likely feed into assessments of Canada’s broader economic momentum heading into 2026, with investors and policymakers watching whether the narrowing trend can be sustained in the coming months.