Canada: Trade Deficit Shrinks More Than Expected.

Canada’s trade deficit narrowed to C$1.31 billion in December 2025 from a C$2.58 billion deficit in November and beating expectations for a C$2.1 billion deficit. Exports rose 2.6% m/m to C$65.63 billion, with metal and non-metallic mineral exports up 18.0% as unwrought gold and related shipments rebounded, while aircraft and other transportation equipment and parts jumped 20.5% to a record high. These gains were partly offset by a 1.0% decline in energy product exports. Exports to the US increased 1.1%. Imports increased 0.6% to C$66.93 billion, led by higher imports of motor vehicles and parts (+5.1%) and metal and non-metallic mineral products (+7.7%), even as consumer-goods imports fell 4.5%. As a result, Canada’s surplus with the US narrowed to C$5.7 billion, while the deficit with countries other than the US narrowed to C$7.0 billion.