According to Statistics Canada, Canada's merchandise trade balance with the world recorded its second consecutive monthly surplus, narrowing from a revised $1.0 billion in November to $923 million in December. Exports were up 0.8 percent on the strength of higher energy product prices. Imports increased 1.0 percent, mainly on stronger imports of aircraft and industrial machinery.
In real (or volume) terms, exports were down 1.4 percent in December as a result of declines in metal ores and non-metallic minerals as well as motor vehicles and parts. Import volumes were up 0.4 percent on higher real imports of industrial machinery, equipment and parts. Consequently, Canada's trade surplus with the world in real terms narrowed from $2.9 billion in November to $2.1 billion in December.
Exports to the United States edged up 0.2 percent to $34.2 billion in December, while imports from the United States increased 1.3 percent to $29.7 billion. Consequently, Canada's merchandise trade surplus with the United States narrowed from $4.7 billion in November to $4.4 billion in December.
In an annual comparison, total annual exports on a nominal basis were down 0.7 percent to $521.1 billion in 2016. Lower exports of energy products were partially offset by higher exports of motor vehicles and parts. Total annual imports edged down 0.1 percent to $547.2 billion. Fewer imports of energy products; aircraft and other transportation equipment and parts; and metal and non-metallic mineral products were mostly offset by more imports of motor vehicles and parts.
Consequently, Canada's annual merchandise trade deficit with the world widened from $23.0 billion in 2015 to $26.1 billion in 2016.