| Consensus | Consensus Range | Actual | Previous | Revised | |
| Balance | C$-1.8B | C$-4.8B to C$-1.5B | C$-5.743B | C$-3.649B | C$-4.182B |
| Imports - M/M | 8.4% | -1.1% | -0.8% | ||
| Imports - Y/Y | 3.8% | -5.1% | -4.7% | ||
| Exports - M/M | 6.4% | -4.7% | -5.2% | ||
| Exports - Y/Y | -2.6% | -14.6% | -15.0% |
Highlights
Once again, Canada's merchandise trade deficit widened far more than expected, reaching C$5.743 billion in February, the largest deficit since August 2025. Forecasters in an Econoday survey had anticipated a C$1.8 billion gap, with the widest deficit estimate at minus C$4.8 billion. After revisions, the January deficit is now at minus C$4.2 billion, wider than the C$3.6 billion gap initially reported.
That being said, trade activity increased sharply in February, with exports up 6.4 percent to C$66.3 billion, the highest level since March 2025. Exports increased across 9 of 11 categories, with volumes up 4.8 percent.
Imports rebounded 8.4 percent on the month, with all but one category increasing, led by higher volumes as real imports rose 7.1 percent.
Metal and non-metallic mineral products played an important role in February's results, with exports up 11.2 percent and imports surging 45.6 percent, led by gold-related transactions. Exports of unwrought gold, silver, and platinum group metals, and their alloys rose 14.2 percent and imports more than doubled. Excluding unwrought gold, silver, and platinum group metals, and their alloys, dominated by gold, overall exports were up 5.5 percent and imports rose 5.8 percent.
Trade activity in motor vehicles and parts was also active in February, with exports rebounding 24.2 percent after falling 21.0 percent in January, and imports up 5.9 percent.
In the energy sector, exports were up 2.6 percent and imports 20.1 percent. Consumer goods exports were up 5.1 percent and imports rose 4.1 percent.
Regionally, exports to the U.S., Canada's main trading partner, increased 4.4 percent, outpaced by a 13.6 percent increase in imports, which reached their highest level since March 2025, led by gold and passenger cars. The trade surplus with the U.S. shrank to C$1.7 billion in February, the smallest since May 2020, from C$4.9 billion in January.
Meanwhile, Canada's merchandise trade deficit with other countries narrowed to C$7.5 billion from C$9.1 billion, with imports up 1.6 percent and exports up 10.5 percent.
When also including services, the international trade deficit widened to C$5.3 billion in February from C$4.2 billion in January.
Market Consensus Before Announcement
The consensus sees the deficit narrower at C$1.8 billion for February versus a large deficit of C$3.649 billion in January on higher oil prices and rising auto exports.
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.