According to Statistics Canada, in December, Canada's merchandise exports decreased 1.2 percent, mostly on lower exports of energy products. Meanwhile, imports were down 1.3 percent, mainly driven by lower imports of consumer goods. As a result, Canada's merchandise trade deficit with the world narrowed from $219 million in November to $160 million in December.
Total exports fell 1.2 percent to $63.0 billion in December, the lowest level since February 2022. Declines were observed in 7 of the 11 product sections, with exports of energy products leading the decreases. However, excluding energy products, exports posted an opposite movement, increasing by 0.8 percent. Total exports in real (or volume) terms were also up, rising 0.9 percent in December.
Total imports fell 1.3 percent to $63.1 billion in December, the lowest level since March 2022. Decreases were observed in 7 of the 11 product sections, but the decline in imports was largely attributable to negative movements in the consumer goods and motor vehicles and parts product sections. In real (or volume) terms, total imports fell 1.9 percent.
Imports from countries other than the United States decreased 3.8 percent in December, a second consecutive monthly decline. Imports from Switzerland (pharmaceutical products), Mexico (various products), and the Netherlands (motor gasoline) led the decreases.
Exports to countries other than the United States were down 4.5 percent in December. Exports to China (oilseeds and canola) and the United Kingdom (gold) posted the largest decreases.
Canada's trade deficit with countries other than the United States narrowed from $7.3 billion in November to $7.1 billion in December.
Exports to the United States edged down 0.1 percent in December, while imports saw a 0.2 percent uptick. As a result, the merchandise trade surplus with the United States narrowed for a seventh consecutive month, moving from $7.1 billion in November to $7.0 billion in December.
As for the full-year 2022, following annual deficits from 2015 to 2020, Canada's merchandise trade balance posted a surplus for a second consecutive year in 2022. Canada's merchandise trade surplus widened from $4.6 billion in 2021 to $20.1 billion in 2022.
The sharp rise in the annual trade surplus was primarily on account of higher exports (+22.1 percent), which were mostly driven by strength in prices. Imports (+19.8 percent) also rose considerably in 2022. Higher prices accounted for a significant part of the growth in imports in 2022, but to a lesser extent than for exports.