| Consensus | Consensus Range | Actual | Previous | Revised | |
| Balance | C$-0.7B | C$-1.2B to C$0.7B | C$-2.197B | C$-0.583B | C$-0.395B |
| Imports - M/M | -0.1% | 3.4% | |||
| Imports - Y/Y | -0.7% | 0.9% | |||
| Exports - M/M | -2.8% | 2.1% | 2.4% | ||
| Exports - Y/Y | -3.1% | 0.9% | 1.4% |
Highlights
Canada's merchandise trade deficit widened much more than expected in November, reaching C$2.2 billion from a C$395 million gap in October, as a 2.8 percent export decline outpaced the 0.1 percent import decrease. Forecasters in an Econoday survey had anticipated a C$0.7 billion deficit.
Real exports were down 0.9 percent from October, while import volumes increased 0.9 percent.
While exports increased across 8 of 11 categories, the large declines in a few categories overshadowed these gains.
A 24.4 percent plunge in metal and non-metallic mineral products dragged exports performance down. Excluding this category, exports would actually have increased 2.5 percent on the month. Exports of gold to the U.S., the UK and Hong Kong fell. Still, exports of unwrought gold, silver, and platinum group metals, and their alloys, mainly composed of unwrought gold, were up 39.5 percent between January and November 2025 compared to the same period in 2024, owing to higher gold prices.
An 11.6 percent drop in motor vehicles and parts to C$6.8 billion, the lowest level in three years, also weighed on exports in November against the backdrop of a semiconductor shortage. Exports of medium and heavy trucks, buses, and other motor vehicles plunged 53.8 percent as new tariffs by the U.S. on these products came into effect in November.
On the upside, energy product exports increased 8.5 percent.
The import picture was mixed, with declines across 7 of 11 categories, owing to lower prices while volumes increased. On the downside, motor vehicles and parts fell 4.5 percent, energy products were down 10.6 percent and electronic and electrical equipment and parts decreased 3.8 percent. These were offset by a 6.2 percent gain in consumer goods.
Regionally, exports to the U.S. contracted 1.8 percent and imports 5.4 percent, leading to a widening trade surplus to C$6.6 billion in November from C$5.2 billion in October.
Imports from countries other than the U.S. rose 7.8 percent to an all-time high, led by imports from China, Germany and Belgium. Exports, meanwhile, fell 4.9 percent. As a result, Canada's deficit with non-U.S. countries widened to C$8.8 billion from C$5.6 billion.
In services, exports declined 1.5 percent and imports increased 0.5 percent. When factoring in both goods and services, Canada's trade balance with the world posted a deficit of C$2.2 billion in November after recording a surplus of C$27 million.
Market Consensus Before Announcement
The consensus sees the balance in deficit at a similar C$0.7 billion after C$0.583 billion in October.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Nominal data are supplied with regards to principal trading partners and product classification.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. This is particularly true for Canada which relies on exports and particularly those to the U.S. for growth. It should be noted that this report focuses solely on goods trade - it leaves services trade for the quarterly national accounts and balance of payments reports.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.