Canada’s merchandise trade deficit with the world widens: Statistics Canada

In January, Canada’s merchandise exports decreased 4.7%, while imports were down 1.1%. As a result, Canada’s merchandise trade deficit with the world widened from $1.3 billion in December to $3.6 billion in January, according to a report by Statistics Canada.

After rising 2.5% in December, total exports were down 4.7% in January, the largest percentage decline since April 2025. In January 2026, decreases were observed in 6 of the 11 product sections. In real (or volume) terms, total exports declined 5.8%, said the federal agency.

“Exports of motor vehicles and parts fell 21.2% to $5.4 billion in January, the lowest level since September 2021. Exports of passenger cars and light trucks (-32.5%) saw the largest decline, mainly due to lower motor vehicle production in Canada in January 2026. Changes in the models produced resulted in prolonged seasonal production stoppages in January, which strongly affected exports of passenger cars and light trucks,” it said.

“Following a 17.9% increase in December, exports of metal and non-metallic mineral products were down 8.0% in January. As was the case in December, exports of unwrought gold, silver, and platinum group metals, and their alloys—a category largely composed of unwrought gold—contributed the most to the monthly movement in January (-12.6%). This decrease was mainly the result of lower shipments of unwrought gold to the United Kingdom.

“After posting a strong increase in December to close a record year in 2025, exports of aircraft and other transportation equipment and parts decreased 16.0% in January. As in December, exports of aircraft (-22.7%) and aircraft engines, parts and other transportation equipment (-7.9%) contributed the most to the monthly variation in this product section in January. For both product groupings, lower exports to the United States were observed.”

In January, total imports fell 1.1%. Overall, decreases were observed in 7 of the 11 product sections. In real (or volume) terms, total imports were down 2.2%, said the report.

“Imports of electronic and electrical equipment and parts fell 3.6% in January. The largest contributor to the decrease was imports of communication, and audio and video equipment (-9.9%), driven by lower imports of smartphones from China and the United States in January. These declines occurred amid the semiconductor chip supply issues affecting several industries, including the communication device manufacturing sector.

“Imports of industrial machinery, equipment and parts (+3.4%) partly offset the overall decline in January, mainly on higher imports of other industry specific manufacturing machinery (+53.1%). The shipment of modules and equipment from China for the construction of liquefied natural gas production infrastructure in British Columbia drove the increase in imports in this product group in January.”

Statistics Canada said exports to the United States decreased 3.8% in January, while imports from the United States fell 3.4%. As a result, Canada’s merchandise trade surplus with the United States narrowed slightly from $5.7 billion in December to $5.4 billion in January.

Mario Toneguzzi