Choose your settings

Choose your language
Economic News

Canada: Trade Deficit Widened as Gold Exports Lose Their Shine

January 29, 2026
LJ Valencia
Economist

Highlights

  • Canada’s international merchandise trade deficit widened to $2.2B in November from $0.4B in the prior month (graph 1). This was deeper into negative territory than the consensus expectation for a $0.7B deficit. See table for more details.
  • Goods exports were down 2.8% m/m in November. Imports fell by 0.1%. In real terms, exports decreased by 3.7% while imports increased by 0.4%.
  • Canada’s trade surplus with the US grew from $5.2B to $6.6B in November (graph 2). Meanwhile, the trade deficit with countries other than the United States widened from $5.6B to $8.8B in the month as imports from outside the US reached an all-time high.
  • The services trade balance was essentially flat in November, after posting a $0.4B surplus in October. Exports of services were down 1.5% while services imports were up 0.5%.

Comments

Canada’s exports saw a setback in November despite gains observed in eight out of 11 export categories. Exports of metal and non-metallic mineral products fell 24.4% m/m, on the back of lower gold exports to the UK, the US and Hong Kong. Despite this decline, exports of precious metals such as gold were up 39.5% since the beginning of 2025, as gold prices skyrocketed. Motor vehicles and parts exports were down 11.6% m/m in November, reaching their lowest level in three years. Decreasing production and the new US import tariffs on medium and heavy trucks contributed to the decline. That said, energy exports were a bright spot in the month, up 8.5% as the volume of crude oil and bitumen increased.

On the other side of the trade balance, seven out of 11 import categories saw decreases. Imports of motor vehicles and parts saw their largest decline (-4.5%), coinciding with lower production of passenger vehicles in the US. Energy imports also fell (-10.6%), on the back of lower imports from the US and Nigeria. In contrast, imports of consumer goods rose (6.2%), largely thanks to a higher influx of pharmaceutical and medicinal products from Ireland and Belgium. 

Implications

With today’s trade data, net exports are expected to be a drag on Q4 output growth. We expect real GDP growth to be around 0.25% in the quarter but downside risks persist due to tariff uncertainty. This comes despite effective tariff levels External link. remaining low due to greater compliance with the Canada-United States-Mexico Agreement (CUSMA), which exempts a majority of Canadian goods entering the US from duties. Note that our tracking is above the Bank of Canada's January Monetary Policy Report forecast of no change in real GDP.  

Our latest outlook External link. suggests economic growth for 2026 but the road ahead is likely to be volatile given trade disruptions and uncertainty. Given these developments, and recent inflation figures External link. close to the Bank’s 2% target, the Bank of Canada held rates steady in its recent announcement External link. but signalled it is ready to respond if the outlook changes.

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.