OTTAWA: Canada’s merchandise trade deficit narrowed significantly in December, falling to $1.3 billion from a revised $2.6 billion in November. According to the latest report from Statistics Canada released on February 19, 2026, the reduction in the trade gap was primarily driven by a surge in exports of metal and non-metallic mineral products, which helped offset a smaller rise in imports.
Total exports for the month climbed 2.6% to reach $65.6 billion. This growth was heavily concentrated in the metals sector, which saw an 18% increase, largely due to high shipments of unwrought gold and other precious metals to the United Kingdom. Interestingly, the federal agency noted that if this specific metal products group were excluded, overall exports for December would have actually edged down by 0.2%, highlighting how vital gold shipments were to the month’s performance.
On the other side of the ledger, total imports rose by 0.6% to $66.9 billion. The increase in imports was spearheaded by the automotive sector, with motor vehicles and parts gaining 5.1% during the month. This rise in auto imports suggests a steady demand for transportation equipment despite broader economic fluctuations. In volume terms—which accounts for price changes—both exports and imports grew by 1.4%.
The December figures capped off a volatile year for Canadian trade in 2025, which saw the country’s total merchandise trade deficit balloon to over $31 billion for the full year. While the narrowing of the deficit in December is a positive sign, economists point out that export demand in many other sectors—including chemicals, forestry, and consumer goods—remained relatively weak as the year came to a close.
