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Canada’s merchandise trade deficit widened sharply in February as imports surged to a record high, outstripping an increase in exports, according to Statistics Canada.
The deficit expanded to $5.7 billion, from $4.18 billion in January. The gap came in well above market expectations of $2.5 billion, Royal Bank of Canada said in a report.
Total imports rose 8.4 percent to about $72.1 billion in February, a record high, while exports rose by 6.4 percent to about $66.3 billion, the highest since March 2025, according to the official statistics.
In February, numerous sectors saw increases in imports, including metal and non-metallic mineral products (45.6 percent), motor vehicles and parts (5.9 percent), and energy products (20.1 percent). Consumer goods; metal ores and non-metallic minerals; and basic and industrial chemical, plastic, and rubber products also contributed to the surge in imports.
Meanwhile, export gains were driven partly by motor vehicles and parts, as well as metals shipments.
After a drop of 21 percent in January, exports of motor vehicles and parts rose 24.2 percent in February, with all product subcategories posting increases, the data showed.
Exports of metal and non-metallic mineral products rose 11.2 percent, while agricultural exports also saw a significant increase. Farm, fishing, and intermediate food products rose 10.5 percent, while exports of other crop products jumped 29.1 percent due to higher shipments of barley and soybeans to China. Canola exports, meanwhile, rose by 21.9 percent—a fifth straight monthly increase—mainly due to higher exports to China, France, and Japan.
Meanwhile, the data showed exports to the United States accounted for roughly 67 percent of all exports for the month—the lowest percentage for U.S. exports on record.
Canada is pushing to diversify markets beyond the United States in an attempt to provide longer‑term stability for export‑oriented industries. For example, Ottawa recently launched new funding streams to help agricultural and agri‑food exporters expand into emerging markets, underlining a government push to deepen trade links outside traditional partners.
Due to an increase in gold imports, Canada’s trade surplus with the United States narrowed to $1.7 billion in February from $4.9 billion in January, the smallest surplus since May 2020.
“Imports were heavily influenced by higher Canadian gold purchases—a third of the nominal increase in imports and almost half of the increase controlling for price changes came from higher imports of metal and non-metallic mineral products,” Nathan Janzen, an analyst with the Royal Bank of Canada, said in a report.
Canada’s merchandise trade balance has swung widely over recent months amid volatile global demand and shifting supply chains. In January, the trade deficit was $3.6 billion after exports dipped sharply, while imports also fell modestly in the first month of the year, underscoring the volatility in monthly data.
