Canada saw its international trade deficit shrink substantially in December, with export growth outpacing import increases, according to new government data released Thursday. Meanwhile, the proportion of Canadian goods shipped to the United States reached a historic low point.
The northern nation recorded a trade deficit of C$1.31 billion ($957 million) last month, a significant improvement from November’s revised C$2.59 billion shortfall, Statistics Canada reported. Financial analysts had projected the December deficit would be approximately C$2 billion.
Export revenues climbed 2.6% to reach C$65.63 billion, with metals and non-metallic mineral shipments driving much of the increase through an 18% surge in December. Unwrought gold exports led this category with gains exceeding 37%, boosted by rising commodity prices.
When metals and non-metallic products are excluded from calculations, Canadian exports actually declined by 0.2%. The statistics agency noted that total export volumes increased 1.4%.
Import spending grew more modestly at 0.6% to C$66.93 billion, with increases recorded across six of eleven product categories. Gold, passenger vehicles, and energy products accounted for most of the import growth.
Regarding trade with America, shipments to Canada’s primary trading partner increased 1.1%, representing just over 67.4% of all exports compared to 76.2% during the same period last year.
While this marked the first quarterly percentage increase in southbound shipments in three months, the American share of Canadian exports dropped to its lowest point since data tracking commenced, with only two pandemic months in 2020 showing lower figures.
The US export share stood at 68.4% in November and 67.5% in October.
American imports into Canada rose at a faster 3.5% rate, reducing Canada’s trade surplus with its southern neighbor from C$6.5 billion in November to C$5.7 billion.
Conversely, Canadian exports to non-US destinations maintained their upward trend, setting a new record high in December. Gold shipments to the United Kingdom generated most of these gains.
Imports from nations other than the United States decreased 3% in December, and Canada’s trade deficit with non-US countries improved from $9 billion in November to $7 billion, according to StatsCan.
The Canadian dollar strengthened slightly, trading up 0.03% at 1.3690 against the US dollar, equivalent to 73.05 cents. Two-year government bond yields rose 0.9 basis points to 2.236%.
