Canada posts October trade deficit as exports shift away from U.S. market

(Horizon Weekly) — Canada recorded a smaller-than-expected trade deficit in October, while the share of exports destined for the United States fell to its lowest non-pandemic level on record, highlighting a gradual shift in the country’s trade patterns.

Statistics Canada reported a trade deficit of C$583 million for the month, as imports rose faster than exports. The result followed a revised trade surplus of C$243 million in September and marked the eighth deficit in nine months in 2025.

Exports to the United States accounted for 67.3 percent of total shipments, the lowest share recorded outside pandemic disruptions since the current data methodology was introduced in 1997. While overall exports rose by 2.1 percent, the increase was driven largely by higher demand for precious metals. Excluding those products, total exports declined.

Imports rebounded in October, rising 3.4 percent after falling the previous month, led by a sharp increase in electronic and electrical equipment, particularly computers and related components, reflecting continued strength in domestic investment demand.

Trade with the United States weakened on both sides of the border, with exports falling and imports rising. As a result, Canada’s trade surplus with its largest trading partner narrowed significantly from September levels.

In contrast, exports to non-U.S. markets surged by 15.6 percent to a record high, driven by higher shipments of gold to the United Kingdom and oil to China. The trend aligns with broader economic outlooks for 2026, which emphasize trade diversification and resilience amid ongoing global uncertainty.

(Photo by The Canadian Press/Rob Gurdebeke)