Canada posts first trade surplus in 10 months of $708 million

An aerial view shows container ship Mombasa Express waiting to be unloaded in the Port of Montreal in Montreal on Thursday, Nov.14, 2024. THE CANADIAN PRESS/Christinne Muschi

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

The December trade surplus was at $708 million ($496 million), compared with a revised deficit of $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 U.S., as well as higher crude oil prices and a partly weaker local currency spurred the surplus, Statscan said.

Imports grew by 2.3 p 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 $750 million.

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

Its imports from the U.S. 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 U.S. companies ahead of potential tariffs under President Donald Trump’s administration and strong U.S. 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 U.S. trade deficit with its neighbor north of the border.

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

Canada’s merchandise trade surplus with the U.S. 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 U.S. had with Canada swings to a surplus of roughly $43 billion, Bergman said, citing data from the U.S. Census Bureau.

The combined value of Canadian imports and exports of goods traded with the U.S. surpassed the $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 U.S. and bought 62.2 per cent of its total imports from south of the border. Exports to the U.S. account for roughly 17.8 per cent of Canadian GDP and more than 2.4 million jobs in Canada.

The Canadian dollar CAD= climbed 0.27% to 1.4282 to the U.S. dollar, or 70.02 U.S. cents, on Wednesday. Yields on two-year government bonds CA2YT=RR 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 U.S., Canada’s trade deficit with the rest of the world expanded in December to $10.6 billion from $9.2 billion in November.