Trade Deficit Narrows to $323 Million in November

Key Insights

In November, exports of consumer goods posted larger gains than all other product categories. A sharp rise in exports of pharmaceutical products (+11.9 per cent) was the main driver behind the monthly increase in this product category, on the back of large shipments of medicaments to the United States. Higher exports of refined gold and higher transfers of gold to the United States were responsible for the monthly increase in exports of metal and non-metallic mineral products. Additionally, the depreciation of the Canadian dollar impacted both imports and exports this month. The average value of the Canadian dollar declined 1.1 cents USD in October and November. Exports rose 3.9 per cent over these months. However, in USD, Canadian exports only edged up 0.8 per cent since September.

The near-term outlook for Canadian trade is uncertain. President-elect Donald Trump has announced plans to impose a 25 per cent tariff on all imports from Canada and Mexico on his first day in office. Since merchandise exports account for over 25 per cent of Canada’s GDP, such policies pose a significant threat to the economy. Universal tariffs on Canadian goods would likely lead to a rapid decline in exports, with the auto manufacturing sector especially vulnerable.