Choose your settings

Choose your language
Economic News

Canada: Gold Exports Again Helped Narrow the Trade Deficit in December

February 19, 2026
LJ Valencia
Economist

Highlights

  • Canada’s international merchandise trade deficit narrowed to $1.3B in December from $2.6B in November (graph 1). This was smaller than the consensus expectation for a $2.2B deficit. See table for more details.
  • Goods exports were up 2.6% m/m in December, with real exports rising 3.1% in the month. Imports also rose in December, by 0.6%, as a 1.7% increase in volumes was partly offset by a decline in prices thanks to a stronger Canadian dollar.
  • Canada’s trade surplus with the US fell from $6.5B to $5.7B in December (graph 2). Meanwhile, the trade deficit with countries other than the United States narrowed from $9.0B to $7.0B in the month as exports to outside the US reached an all-time high.
  • The services trade surplus expanded from $0.1B to $0.7B in December. Exports of services were up 0.8% m/m while services imports were down 2.2% in the month.

Comments

Gold shipments helped support overall export numbers in December, offsetting losses in 7 of the 11 export  categories. Exports of metal and non-metallic mineral products surged 18.0%, driven largely by higher shipment volumes of gold to the United Kingdom, the United States, and Australia. For the full year, precious‑metal exports increased by 41.7% in 2025, largely thanks to soaring prices. Aircraft and other transportation equipment and parts also saw notable gains (20.5%), supported by stronger exports of business jets and aircraft engines to the United States. In contrast, export categories such as metal ores and non-metallic minerals (-7.2%), and forestry products and building and packaging materials (-4.6%) recorded declines.

 

On the other side of the trade balance, 6 out of 11 import categories saw increases. Imports of motor vehicles and parts saw significant gains (5.1%), on the back of higher imports of passenger cars and light trucks from countries such as Mexico and the Netherlands. Imports of metal and non-metallic mineral products rose (7.7%) mainly due to a higher influx of gold purchased from the US. In contrast, fewer imports were observed in categories such as consumer goods (-4.5%) and basic and industrial chemical, plastic, and rubber products (-4.7%).

Implications

Including December’s trade data, net exports are anticipated to have a modest drag on Q4 output growth. This occurred despite effective tariffs External link. staying low due to greater compliance with the Canada–United States–Mexico Agreement (CUSMA), which exempts the majority of Canadian goods exports to the US from duties. We now expect real GDP to be flat in the fourth quarter, in line with the Bank of Canada’s January Monetary Policy Report External link..

 

That said, trade disruptions and uncertainty are likely to impact economic activity throughout 2026. Downside risks persist due to tariff uncertainty heading into the CUSMA joint review. The recent trade agreement with China should help to support agricultural and seafood exports, but likely won’t be enough to fully offset the impact of US‑induced trade volatility.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.