Canada’s merchandise trade deficit narrowed to $1.3B in December (from $2.6B in November) as exports rose +2.6% MoM and imports increased +0.6% MoM, reflecting stronger export growth than imports.

• Merchandise exports increased +2.6% MoM after -2.2% in November, led by metal and non-metallic mineral products (+18.0%) and record aircraft and transportation equipment exports (+20.5%), showing gains concentrated in specific sectors.

• Excluding metal and non-metallic mineral products, exports edged down -0.2% MoM, indicating the headline increase was driven largely by gold-related shipments.

• Imports rose +0.6% MoM with motor vehicles and parts up +5.1% and gold-related products up +53.5%, while consumer goods (-4.5%), chemicals (-4.7%), and food products (-7.3%) declined, pointing to mixed category movements.

• The trade surplus with the United States narrowed to $5.7B (Nov: $6.5B) as exports to the U.S. rose +1.1% but imports rose faster at +3.5%.

• Exports to non-U.S. countries rose +5.8% to a record high while imports from those countries fell -3.0%, reducing the non-U.S. deficit to $7.0B (Nov: $9.0B).

• In Q4 2025, total exports increased +3.9% QoQ and imports rose +1.2% QoQ, with real exports +2.1% and real imports +0.3%, indicating exports outpaced imports over the quarter.

• For full-year 2025, exports edged down -0.2% YoY while imports rose +2.8% YoY, widening the annual deficit to $31.3B, the largest since 2020.