According to Statistics Canada, in December, Canada's merchandise exports decreased 1.9 percent, while imports edged up 0.2 percent. As a result, Canada's merchandise trade balance with the world went from a surplus of $1.1 billion in November to a deficit of $312 million in December, the first monthly trade deficit since July. The December deficit is close to the typical bounds for monthly revisions to imports and exports.
Total exports fell 1.9 percent in December, a second consecutive monthly decline. Decreases were observed in 7 of the 11 product sections. In real (or volume) terms, total exports fell 0.4 percent in December.
Total imports edged up 0.2 percent in December, despite declines in 8 of the 11 product sections. Imports of consumer goods posted the largest gain. Excluding this product section, imports were down 2.0 percent in December. In real (or volume) terms, total imports rose 1.3 percent.
Exports to the United States were down 3.4 percent in December, falling for a third consecutive month. Meanwhile, imports from the United States increased 0.7 percent. As a result, Canada's merchandise trade surplus with the United States narrowed from $11.2 billion in November to $9.2 billion in December.
Exports to countries other than the United States were up 3.3 percent in December. Gains were observed in exports to Italy (aircraft and pharmaceutical products), Hong Kong (unwrought gold), Norway (nickel) and Australia (aircraft). Imports from countries other than the United States were down 0.6 percent, due in part to lower imports from the United Kingdom (unwrought gold).
Canada's trade deficit with countries other than the United States narrowed from $10.1 billion in November to $9.5 billion in December.
For the full-year 2023, Canada's annual merchandise trade balance with the world moved from a surplus of $19.7 billion in 2022 to a slight deficit of $1.4 billion in 2023. The change in the annual merchandise trade balance was attributable to higher imports (+1.4 percent) combined with a virtually equivalent decrease in exports (-1.4 percent).
The gain in imports in 2023 was largely attributable to a sharp increase in imports of motor vehicles and parts (+19.5 percent), while the drop in exports was driven by a large decline in exports of energy products (-18.9 percent).
In terms of trade activity, Canada's total merchandise trade (imports plus exports) remained essentially unchanged in 2023, standing at $1.5 trillion for a second consecutive year.