Canada’s Trade Deficit Surges in November as Exports Fall, Raising Economic Concerns

Canada’s Trade Deficit Widens Sharply in November as Falling Exports Add Pressure on the Economy

According to the latest official trade data released on January 29, 2026, Canada recorded a sharp increase in its trade deficit in November 2025, driven primarily by a notable decline in exports while imports remained largely stable. Economists say the figures highlight growing pressure on Canada’s export-dependent economy amid weak global demand, rising production costs, and ongoing structural challenges in international trade.

Official statistics show that Canada’s overall trade deficit widened to approximately C$2.2 billion in November 2025, a significant jump from C$395 million recorded in October. The sharp month-to-month deterioration underscores the scale of the slowdown in export activity and reflects broader weakness across key sectors of the economy.

Total Canadian exports fell by 0.9 percent during November. While the headline decline appears modest, a deeper breakdown reveals substantial weakness in several major export categories. Exports of metals and non-metallic mineral products plunged by 24.4 percent, largely due to reduced global demand for raw gold and other industrial metals. At the same time, exports of motor vehicles and auto parts dropped by 11.6 percent, reflecting slowing global automotive demand and ongoing production disruptions.

Imports, by contrast, declined by just 0.1 percent, indicating that domestic demand remained relatively resilient. Although imports of energy products and some industrial inputs fell slightly, purchases of consumer goods, electronics, and machinery stayed firm. This imbalance between weakening exports and steady imports played a central role in widening the trade gap.

Trade with the United States, Canada’s largest trading partner, remained comparatively strong. In November, Canada’s trade surplus with the U.S. increased to C$6.6 billion, up from C$5.2 billion in October. Imports from the U.S. declined by 5.4 percent, while exports to the American market edged down by 1.8 percent. However, this improvement was not enough to offset losses elsewhere.

The main source of pressure came from trade with non-U.S. partners. Exports to countries including China, Germany, Japan, Mexico, South Korea, the United Kingdom, France, Italy, and the Netherlands fell by a combined 4.9 percent in November. At the same time, imports from these countries rose by 7.8 percent, driven by higher purchases of electronics and machinery from China and Germany, auto components from Japan and South Korea, and consumer and chemical products from Europe. As a result, Canada’s trade deficit with countries outside the United States widened sharply to C$8.8 billion, significantly higher than the previous month.

Economists point to several underlying factors behind the widening deficit. Global economic growth has slowed, particularly in Europe and parts of Asia, reducing demand for Canadian exports. Volatility in commodity prices has weighed on export revenues, while rising energy, transportation, and labor costs have made Canadian products less competitive internationally.

A look at the past five years shows that November’s figures are part of a longer-term trend rather than an isolated event. In 2021, Canada recorded annual exports of approximately C$637 billion and imports of C$631 billion, with trade performance constrained by pandemic-related supply chain disruptions. In 2022, elevated global energy and raw material prices pushed exports up to around C$770 billion, while imports reached C$760 billion, resulting in several months of strong trade surpluses.

However, momentum faded in 2023 as global growth slowed. Exports declined to roughly C$720 billion, while imports rose to about C$735 billion, producing an average monthly trade deficit of around C$1.5 billion. In 2024, higher global interest rates and weak external demand kept exports near C$705 billion, while imports remained elevated at approximately C$720 billion, leading to repeated monthly deficits. By 2025, trade pressures intensified further, with multiple deficit months culminating in November’s C$2.2 billion gap.

Analysts warn that a sustained trade deficit could weigh on the Canadian dollar, slow overall economic growth, and dampen investment sentiment. Unless export performance improves, policymakers may face increasing pressure to support exporters, diversify trade markets, and strengthen domestic industrial competitiveness.

Overall, Canada’s November trade data highlight mounting challenges facing the economy as global demand weakens and trade imbalances widen. Without targeted policy measures and a recovery in international markets, the trade deficit could remain elevated in the months ahead.