PUBLISHED April 28, 2026
Trade Balance Moves Deeper Into Deficit
According to “The Daily — Canadian international merchandise trade, February 2026” published by Statistics Canada, Canada’s merchandise trade deficit widened to CAD 1.5 billion in February 2026, compared with a CAD 610 million deficit in January. The result marked a notable deterioration in the country’s monthly trade position.
Exports Fell During the Month
Total exports declined 5.5% in February to CAD 64.7 billion. Statistics Canada noted that lower exports were spread across several product categories, showing broader softness in external demand rather than weakness in only one sector.
Energy Products Weighed on Performance
One of the largest negative contributors came from energy products, where export values decreased during the month. Given the importance of oil and gas shipments to Canada’s trade performance, changes in this category often have a strong impact on headline results.
While exports weakened, imports rose 1.9% to CAD 66.2 billion. Higher imports can reflect resilient domestic demand, but when combined with falling exports they also widen the monthly trade gap.
While exports weakened, imports rose 1.9% to CAD 66.2 billion. Higher imports can reflect resilient domestic demand, but when combined with falling exports they also widen the monthly trade gap.
The United States continued to dominate Canada’s trade flows. As Canada’s largest trading partner, changes in U.S. demand, industrial activity, and cross-border supply chains remain decisive for monthly Canadian export performance.
Merchandise trade is a key indicator for Canada’s economic momentum. Softer exports can weigh on GDP growth, manufacturing activity, transportation volumes, and business confidence—especially in export-heavy provinces.
The next months will show whether February was a temporary setback or the beginning of a weaker trade trend. If commodity prices stabilize and U.S. demand improves, exports may recover. If not, Canada could face continued pressure on growth through the second quarter of 2026.
The United States continued to dominate Canada’s trade flows. As Canada’s largest trading partner, changes in U.S. demand, industrial activity, and cross-border supply chains remain decisive for monthly Canadian export performance.
Merchandise trade is a key indicator for Canada’s economic momentum. Softer exports can weigh on GDP growth, manufacturing activity, transportation volumes, and business confidence—especially in export-heavy provinces.
The next months will show whether February was a temporary setback or the beginning of a weaker trade trend. If commodity prices stabilize and U.S. demand improves, exports may recover. If not, Canada could face continued pressure on growth through the second quarter of 2026.
