Canada’s trade deficit widened to C$3.6 billion in January 2026 from a C$1.3 billion deficit in December and way more than the expected C$0.9 deficit. Exports fell 4.7% m/m to C$62.48 billion, with motor vehicle and parts exports down 21.2% as production stoppages affected passenger car shipments, while aircraft and other transportation equipment and parts decreased 16.0%. These declines were partly offset by a 4.1% increase in energy product exports, driven by natural gas. Exports to the US decreased 3.8%. Imports decreased 1.1% to C$66.13 billion, led by lower imports of motor vehicles and parts (-4.5%) and electronic and electrical equipment and parts (-3.6%), even as imports of industrial machinery, equipment and parts rose 3.4%. As a result, Canada’s surplus with the US narrowed to C$5.4 billion, while the deficit with countries other than the US widened to C$9.0 billion.