According to Statistics Canada, Canada's merchandise trade deficit with the world totaled $3.2 billion in December, widening from a $2.7 billion deficit in November. Imports rose 1.5 percent and exports were up 0.6 percent, both led by energy products.
Total imports were up 1.5 percent to a record $49.7 billion in December, with increases in 9 of 11 sections. Volumes rose 1.0 percent and prices increased 0.5 percent. Higher imports of energy products and industrial machinery, equipment and parts were partially offset by lower imports of aircraft and other transportation equipment and parts.
Imports of industrial machinery, equipment and parts also contributed to the overall gain in December, up 6.3 percent to $5.0 billion. Imports of logging, mining and construction machinery and equipment led the way, rising 24.6 percent to a record $897 million, the third consecutive monthly increase. These gains precede new emissions regulations affecting off-road diesel engines and machines. As of January 1, 2018, imports of equipment not meeting the new standards are no longer permitted.
Total exports rose for the third consecutive month, up 0.6 percent to $46.5 billion in December despite decreases in 6 of 11 sections. Prices were up 0.5 percent while volumes were essentially unchanged. Higher exports of energy products, and metal and non-metallic mineral products were partially offset by lower exports of consumer goods. Exports excluding energy products decreased 0.6 percent.
Following a 5.6 percent increase in November, imports from countries other than the United States rose 6.8 percent to $18.2 billion in December, notably on higher imports of passenger cars and light trucks from Germany as well as refined petroleum energy products from the Netherlands.
Exports to countries other than the United States rose 4.9 percent to $11.6 billion in December, led by Japan (aircraft), India (potash), the United Kingdom (unwrought gold) and Hong Kong (also unwrought gold). As a result, Canada's trade deficit with countries other than the United States widened from $6.0 billion in November to $6.6 billion in December.
Imports from the United States fell 1.3 percent to $31.5 billion in December, while exports to the United States were down 0.8 percent to $34.9 billion. Canada's trade surplus with the United States widened slightly from $3.3 billion in November to $3.4 billion in December.
Annual exports on a nominal basis were up 5.3 percent to $549.3 billion in 2017, almost entirely on higher energy product exports. Annual imports were up 4.7 percent to $573.2 billion. Imports of motor vehicles and parts, energy products, and consumer goods contributed the most to the increase. Consequently, Canada's annual merchandise trade deficit with the world narrowed from $25.9 billion in 2016 to $24.0 billion in 2017.