Canada's merchandise trade balance deteriorated markedly in February as a sharp rise in imports outpaced gains in exports, according to government trade figures released in early April. The deficit for the month stood at C$5.74 billion, wider than the upwardly revised C$4.18 billion recorded in January.
Total imports climbed 8.4% in February to C$72.1 billion, the highest monthly value on record, while import volumes grew 7.1%. A pronounced increase in metal and non-metallic mineral product imports led the advance - that category rose 45.6%, with purchases of gold in the United States by Canadian entities identified as a major factor.
Statistics Canada notes that on a balance of payments basis, transactions where ownership transfers to a Canadian entity are recorded as imports even if the physical good does not cross the border. Customs-based measures, by contrast, capture goods when they physically enter the country.
Other categories also supported the import surge. Imports of motor vehicles and parts increased 5.9% as Canadian auto plant production returned online and domestic sales stabilized. Energy product imports rose 20.1% in February, contributing further to the monthly advance.
Exports rose 6.4% in February, rebounding from a decline the prior month, with total shipments reaching C$66.31 billion - the highest export level since March 2025. Unwrought precious metals were important contributors to the export gains: exports of unwrought gold, silver, and platinum group metals and their alloys rose 14.2%, driven by higher shipments of unwrought gold to the U.K.
The combination of stronger imports and rising exports narrowed Canada’s bilateral surplus with the United States to C$1.7 billion in February, down from C$4.9 billion in January. That C$1.7 billion surplus was the smallest since May 2020.
At the same time, exports to destinations other than the United States climbed 10.5% to a record C$22.3 billion in February. That increase helped push Canada's share of exports going to the U.S. down to just over 66% in February, from 68% a month earlier and more than 79% a year earlier when firms had been front-loading shipments ahead of incoming U.S. tariffs.
Analysts polled prior to the release had expected a much smaller deficit; the consensus forecast was for a C$2.25 billion shortfall, roughly half of the actual outcome.
Contextual note - These data show a mix of sectoral drivers behind the monthly swing in the trade account. Precious metals movements - particularly in gold - played a pivotal role in both imports and exports in February, while motor vehicle parts and energy products also materially affected the flow of goods across Canada’s borders.