Canada’s Trade Deficit Widens on Falling Gold, Auto Shipments

Gold coins at the Prospectors & Developers Association of Canada (PDAC) conference in Toronto. Photo by Galit Rodan /Photographer: Galit Rodan/Bloomb

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(Bloomberg) — Canada’s trade deficit widened by more than expected as volatile gold shipments fell and both exports and imports of motor vehicles and parts decreased.

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The country’s trade shortfall was C$2.2 billion ($1.6 billion) in November, Statistics Canada reported Thursday. Economists surveyed by Bloomberg were expecting imports to exceed exports by C$690 million.

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Total exports fell 2.8%, and shipments of metal and non-metallic mineral products posted the largest decrease, falling 24.4%, the agency said. That was driven by lower exports of unwrought gold, silver, platinum and their alloys — a category mostly composed of gold — which fell 36%.

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On a year-to-date basis, the value of those exports are still up 40% amid the spike in gold prices — on a volume basis, there’s little change.

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Gold has also been the most significant contributor to the fluctuations in Canadian exports in recent months, StatCan said in its report. In November, the agency said there were large declines in exports of the precious metal to the UK, US and Hong Kong. 

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Exports of motor vehicles and parts fell 11.6%, reaching the lowest level in three years. The decrease occurred amid a semiconductor shortage that is disrupting the auto industry, the agency noted.

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Energy exports rose 8.5% on higher crude oil shipments, following a sharp decline in export volumes in October, when temporary production shutdowns at US refineries curbed demand for Canadian crude.

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Meanwhile, imports were down 0.1%. Inbound shipments of motor vehicles and parts fell amid reduced production of passenger cars in the US during a shortage of materials and parts. Energy imports declined too.

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In volume terms, exports were down 0.9%, while import volumes rose 0.9%. 

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US tariffs on steel, aluminum, autos and lumber have battered Canadian industries. The US-Mexico-Canada Agreement will be reviewed this year, adding to economic uncertainty and raising questions about the country’s trade outlook. On Wednesday, Bank of Canada Governor Tiff Macklem told reporters that rules-based trade with US was “over.”

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Exports to the US fell 1.8% on the month and imports from the US fell 5.4% to the lowest level since 2022. On yearly basis, they’re down 13.3% and 11.6% respectively, capturing a major shift in trading activity. Taken together, Canada’s trade surplus with the US widened to C$6.6 billion.

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—With assistance from Mario Baker Ramirez.

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