Gold imports surge 45.6% as Canada posts largest trade deficit since August 2025
A record wave of gold buying has blown out Canada’s merchandise trade deficit to $5.7bn in February, the largest since August 2025, even as exports rebounded strongly in key sectors, according to Statistics Canada.
Analysts polled by Reuters had expected a deficit of about $2.25bn, roughly half the actual figure, highlighting the scale of the miss.
Statistics Canada said imports jumped 8.4 percent to a record $72.1bn, while exports rose 6.4 percent to $66.3bn, the highest since March 2025.
The agency reported that exchanges of gold were central to February’s outcome.
Imports of metal and non‑metallic mineral products increased 45.6 percent as imports of unwrought gold, silver, and platinum group metals, and their alloys more than doubled, with higher purchases of gold in the United States contributing the most to the gain.
Statistics Canada said that excluding unwrought gold, silver, and platinum group metals, and their alloys, imports still rose 5.8 percent and exports 5.5 percent.
Reuters noted that when a product exchanges hands from a foreign entity to a Canadian, even without physically crossing the border, it is treated as an import on a balance‑of‑payments basis.
Beyond precious metals, imports were broadly stronger.
Statistics Canada reported that imports of motor vehicles and parts were up 5.9 percent in February, led by a 7.5 percent increase in imports of motor vehicle engines and motor vehicle parts, coinciding with a rebound in motor vehicle production in Canada after production stoppages in January.
Energy product imports rose 20.1 percent, with imports of crude oil and bitumen up 35.3 percent, mainly on higher shipments from the US, and imports of refined petroleum energy products up 31.0 percent on higher aviation fuel from the US.
On the export side, Statistics Canada said total exports rose 6.4 percent in February after a 5.2 percent decline in January, reaching $66.3bn, while exports increased in 9 of 11 product sections.
Statistics Canada said exports of motor vehicles and parts climbed 24.2 percent in February, led by a 40.6 percent increase in passenger car and light truck exports.
Auto production in Canada bounced back after prolonged seasonal stoppages for model change retooling and production line maintenance, following a 21.0 percent drop in January.
Exports of motor vehicle engines and motor vehicle parts increased 8.1 percent, coinciding with higher motor vehicle production in the US.
Statistics Canada reported that exports of metal and non‑metallic mineral products rose 11.2 percent in February, with exports of unwrought gold, silver, and platinum group metals, and their alloys up 14.2 percent, driven by higher exports of unwrought gold to the United Kingdom.
Exports of unwrought aluminum and aluminum alloys increased 19.6 percent after a 17.7 percent decrease in January, mainly because of higher exports to the US.
Exports of farm, fishing and intermediate food products rose 10.5 percent, led by a 29.1 percent increase in other crop products due to higher shipments of barley and soybeans to China, while canola exports posted a fifth consecutive monthly gain, up 21.9 percent mainly to China, France and Japan.
Trade patterns by destination also shifted.
Statistics Canada said imports from the US rose 13.6 percent in February, reaching their highest level since March 2025, with higher imports of gold and passenger cars and light trucks leading the increase, while exports to the US were up 4.4 percent, largely because of higher exports of passenger cars and light trucks.
Canada’s trade surplus with the US narrowed from $4.9bn in January to $1.7bn in February, the smallest surplus since May 2020.
At the same time, Statistics Canada reported that exports to countries other than the US rose 10.5 percent to a record $22.3bn, while imports from those countries increased 1.6 percent to a record $29.7bn, narrowing Canada’s trade deficit with non‑US partners from $9.1bn to $7.5bn.
Reuters quoted Prince Owusu, senior economist with Export Development Canada, as saying that “our dependence on the US is basically slowing down while our non‑US exports are picking up,” and that the diversification was primarily driven by gold exports.
The outlet said Owusu pointed to Prime Minister Mark Carney’s deal with China in January, which helped ease some restrictions and boosted canola, soybeans and barley exports, and added that the coming months would show a bigger surge in exports to China.
Economists also told Reuters that Canada’s exports of oil products would grow in the coming months because of higher crude oil prices owing to the Iran war.
In terms of the broader macro picture, Statistics Canada said that in volume terms total imports rose 7.1 percent in February while exports increased 4.8 percent.
BNN Bloomberg reported that CIBC senior economist Andrew Grantham sees “net trade” as “a drag on GDP during Q1,” with the import surge likely reflecting “restocking within the economy following the drawdown seen at the end of 2025.”
He added that “looking forward, the nominal trade deficit should narrow due to higher energy prices, with the hope that some further improvement in volume terms can also be seen.”
Services trade and markets provided additional context.
Statistics Canada said the country posted a trade in services surplus of $400m in February, as exports of services increased 1.5 percent to $20.3bn and imports of services fell 0.7 percent to $19.9bn.
When international trade in goods and services are combined, Statistics Canada reported that exports increased 5.2 percent to $82.3bn in February, while imports rose 6.3 percent to $92.0bn, taking Canada’s total trade deficit with the world from $4.2bn in January to $5.3bn in February.
Reuters said the Canadian dollar pared losses after the trade data and was down 0.32 percent at $1.3918 to the US dollar, or 71.85 US cents, while yields on the two‑year Government of Canada bond were up 3.8 basis points to 2.696 percent.
