Canada’s global trade gap narrows; US-bound exports hit new low

OTTAWA, Feb 19 (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.

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.

Statistics Canada said the country recorded a C$1.31 billion ($957 million) deficit in December, led by metals and non-metallic mineral exports.

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% 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%, accounting for just over 67.4% of total exports, compared with 76.2% 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% in November and 67.5% in October.

Share of exports to the U.S. on a full-year basis dropped to 72% in 2025 from 76% 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% 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%, 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 3% 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% 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%.

(Reporting by Promit Mukherjee; Editing by Dale Smith and Anil D’Silva)