Canada’s trade deficit drops to to $1.7 billion in December

Merchandise exports increased 1.5 percent, while imports fell 2.3 percent

Statistics Canada announced that the country’s merchandise exports increased 1.5% in December, with energy product exports posting the largest increase. Imports fell 2.3%, mainly because of lower imports of consumer goods.

As a result, Canada’s merchandise trade deficit with the world narrowed from $3.6 billion in November to $1.7 billion in December, the lowest deficit since June 2020.

The Federal agency reports that, for the year 2020, Canada’s trade deficit totalled $36.2 billion, more than double the deficit observed in 2019. Total merchandise exports fell 12.3% in 2020, while imports were down 8.6%. By comparison, during the last major economic downturn, in 2009, annual merchandise exports dropped 24.6% and imports fell 15.7%.

Canada’s trade deficit with countries other than the United States narrowed from $5.8 billion in November to $4.4 billion in December.

Exports to those countries rose 1.6% to $13.9 billion, the seventh increase in eight months. Higher exports to China (iron ore and miscellaneous products) and Switzerland (refined gold and aircraft) were partially offset by lower exports to the United Kingdom (refined gold). Imports from countries other than the United States fell 5.9%. This was the second consecutive monthly decline after five gains from June to October. Imports from Switzerland (pharmaceutical products) and China (cellphones) posted the largest declines.

Exports to the United States increased 1.5%, mainly on higher exports of energy products, while imports from the United States edged down 0.1%. As a result, Canada’s trade surplus with the United States widened from $2.2 billion in November to $2.8 billion in December.