FX.co ★ Canada Trade Deficit Shrinks More Than Expected

Canada’s trade deficit narrowed to C$1.31 billion in December 2025, down from C$2.58 billion in November and better than market expectations for a C$2.1 billion shortfall. Exports rose 2.6% month-on-month to C$65.63 billion. Leading the increase were metal and non-metallic mineral products, which surged 18.0% as shipments of unwrought gold and related products rebounded, and aircraft and other transportation equipment and parts, which climbed 20.5% to a record high. These gains were partially offset by a 1.0% decline in energy product exports. Exports to the United States grew 1.1%.

Imports advanced 0.6% to C$66.93 billion, driven mainly by higher purchases of motor vehicles and parts (+5.1%) and metal and non-metallic mineral products (+7.7%), while imports of consumer goods fell 4.5%. Consequently, Canada’s trade surplus with the United States narrowed to C$5.7 billion, and the trade deficit with countries other than the United States shrank to C$7.0 billion.