Ottawa | Reuters — Canada’s trade deficit narrowed in December even as its share of exports to the United States dropped to the lowest level on record, barring two months during the peak of the COVID-19 pandemic, data showed on Thursday.
Statistics Canada said the country recorded a C$1.31 billion ($957 million) deficit in December, led by metals and non-metallic mineral exports.
WHY IT MATTERS: The latest numbers indicate that Canada has managed to reduce its exposure to the world’s largest economy, which is also its largest trading partner, as non-U.S. exports hit an all-time high.
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That was in contrast to a revised C$2.59 billion deficit in November and narrower than the C$2 billion deficit that economists had expected for December.
Total exports rose 2.6 per cent to C$65.63 billion, driven primarily by the export of unwrought gold and a surge in the metal’s price.
Exports to the United States rose 1.1 per cent, accounting for just over 67.4 per cent of total exports, compared with 76.2 per cent a year ago.
This was the first time in three months that outbound shipments to the south increased in percentage terms, but the share of exports to the U.S. shrank to its lowest level since data collection began, except for a couple of months during the pandemic in 2020.
The share of exports to the U.S. was 68.4 per cent in November and 67.5 per cent in October.
Stats indicate a trend: Export Development Canada
Share of exports to the U.S. on a full-year basis dropped to 72 per cent in 2025 from 76 per cent a year earlier, and this is more likely an indication of a trend than a single-month movement, said Stuart Bergman, chief economist at Export Development Canada.
“The important thing to look at is our exports to countries other than the U.S., and that surged 17 per cent in 2025. That is the story of the resilience of Canadian exports,” he said, adding that although commodity prices did play a part in this, some manufacturing product exports also grew.
Imports from the U.S., however, rose faster by 3.5 per cent, narrowing Canada’s merchandise trade surplus with its southern neighbor to C$5.7 billion from C$6.5 billion in November.
Meanwhile, exports to countries other than the U.S. continued their upward momentum, reaching an all-time high in December. Exports of gold to the United Kingdom led most of the gains.
Imports from countries other than the United States fell three per cent in December, and Canada’s trade deficit with countries other than the United States narrowed to C$7 billion in December from C$9 billion in November, StatsCan said.
The Canadian dollar weakened slightly and was trading down 0.12 per cent at 1.3711 to the U.S. dollar, or 72.93 U.S. cents. Yields on the two-year government bonds were up 0.3 basis points at 2.354 per cent.
