Driven by US stockpiling, Canada posts first trade surplus in 10 months

Canada in December posted its first trade surplus in 10 months as exports expanded faster than imports, led by a push by US businesses to build up inventory ahead of potential tariffs on Canada and generally strong US demand, data showed. 

The December trade surplus was at C$708 million ($496 million), compared with a revised deficit of C$986 million the prior month, helped by an 4.9 per cent growth in exports, Statistics Canada reported on Wednesday. 

Increased shipments of energy products, especially to the US, as well as higher crude oil prices and a partly weaker local currency spurred the surplus, Statscan said. 

 

Imports grew by 2.3 per cent in December, a bit slower than the 2.8 per cent gain seen in November, it said. 

Analysts polled by Reuters had forecast a surplus of C$750 million.

 

Canada's trade surplus with the US widened for the second month in a row, growing 5 per cent in December to C$11.3 billion, led primarily by greater exports of energy products and a higher price of crude oil. 

Its imports from the US fell 1.5 per cent in December. 

"It's not a coincidence that we're seeing a solid uptrend since October," said Stuart Bergman, chief economist with Export Development Canada. 

Stockpiling by US companies ahead of potential tariffs under President Donald Trump's administration and strong US consumer demand led to the rise in exports from Canada, he said. 

Trump, who earlier this week paused a plan to impose 25 per cent tariffs on almost all Canadian imports, has often expressed frustration about the US trade deficit with its neighbor north of the border. 

Canada followed suit by rolling back sweeping retaliatory tariffs against the US, its biggest trading partner. 

Canada's merchandise trade surplus with the US amounted to $102.3 billion for the year 2024, down from a surplus of $108.3 billion in 2023, the statistics agency said. 

If energy products are excluded, the 2024 deficit the US had with Canada swings to a surplus of roughly C$43 billion, Bergman said, citing data from the US Census Bureau. 

The combined value of Canadian imports and exports of goods traded with the US surpassed the C$1 trillion mark for a third consecutive year, Statistics Canada said. 

Last year Canada sent 75.9 per cent of its total exports to the US and bought 62.2 per cent of its total imports from south of the border. 

Exports to the US account for roughly 17.8 per cent of Canadian GDP and more than 2.4 million jobs in Canada. 

The Canadian dollar climbed 0.27 per cent to 1.4282 to the US dollar, or 70.02 US cents, on Wednesday. Yields on two-year government bonds were down 1.2 basis points to 2.613 per cent. 

Total exports in December - rising for the third consecutive month - were driven by energy products which increased by 9.5 per cent, followed by metal and non-metallic mineral products which widened by 9.2 per cent. 

Excluding the US, Canada's trade deficit with the rest of the world expanded in December to C$10.6 billion from $9.2 billion in November.   

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