Monthly trade report: January 2026

ISSN 2819-408X

Highlights

• In January, Canada’s goods and services exports declined by 3.9% (see column “m/m” in Table 1), driven mainly by declines in motor vehicles and parts due to Canadian production disruptions and gold exports for which volumes fell sharply.
• Meanwhile, an increase in services imports only partially offset the decline in goods imports, resulting in an overall 0.4% decrease in imports.
• Canada’s goods trade with the U.S. weakened in January, as exports fell 3.8%, reaching their lowest level since May 2025, while imports declined 3.4%. Exports to non-U.S. markets declined by 6.5% in January reflecting a decline in gold exports to the United Kingdom, while imports from countries other than the U.S. increased by 2.1%, mainly from China.
• The decline in goods export value was largely driven by lower volumes (-5.8%), particularly in motor vehicles and parts. Import volumes also decreased (-2.2%). Small increases in import and export prices did not fully offset the decline in volumes.

Table 1: Canada’s trade performance – January 2026

Note: “m/m” is the change from the previous month; “YTD” is the year-to-date (January to recent month) cumulative change compared to the same period in the previous year.
Data: Statistics Canada. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada.

Figure 1: Canada’s monthly trade performance

Data: Statistics Canada Tables 12-10-0011-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada.

Industry view - exports

Goods exports fell by 4.7% in January 2026. The industry with the fastest decline was motor vehicles and parts (‑21.2%); it experienced its lowest export level since September 2021. Exports of passenger cars and light trucks experienced the most notable decline (-32.5%), driven by changes in the models produced which resulted in prolonged seasonal production stoppages. After a notable rise in December, exports of aircraft and other transportation equipment and parts fell by 16.0% in January, with lower shipments recorded to the U.S..

Exports of metal and non‑metallic mineral products (semi‑finished products, including gold products) declined by 8.0% in January due to lower export volumes of unwrought gold to the United Kingdom. This drop followed a 17.9% increase in December and once again highlighted the impact of significant swings in gold exports for Canada’s overall export performance.

These declines were partially offset by larger exports of energy products (4.1%), mainly driven by exports of natural gas (23.7%) due to higher prices and volumes, with the demand driven by winter conditions in the U.S. Additionally, crude oil increased for a third consecutive month.

Total services exports fell by 1.1% in January, reflecting declines in commercial services (‑2.5%), the fourth consecutive month of declines in commercial services, and in transportation services (‑3.1%). While exports of government services were unchanged, travel services exports increased by 2.4%, driven by higher spending by U.S. residents in Canada.

Figure 2: Exports by industry and sector (monthly % change)

Note: Metal & non-metallic mineral products include intermediate or semi-finished products, while metal ores & non-metallic minerals include raw ores and minerals (e.g., iron ore, potash, stone).
Data: Statistics Canada Tables 12-10-0163-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada

Industry view - imports

Total goods imports fell by 1.1% but comes after 3 consecutive months of growth. Motor vehicles and parts experienced the largest decline in value in January (-$530 million or -4.5%), coinciding with lower Canadian production. Additionally, imports of passenger cars and light trucks declined by 3.6% in January, after an 11.4% increase in December, reflecting lower imports from Mexico and the Netherlands. Imports of electronic and electrical equipment and parts fell by 3.6% in January, after 3 months of growth, driven by a sharp decline in communication, audio, and video equipment (9.9%), reflecting lower smartphone imports from China and the U.S. amid ongoing semiconductor supply constraints.

Imports of industrial machinery, equipment and parts rose 3.4%, driven by machinery and parts contributing to liquefied natural gas production infrastructure in British Columbia, mainly from China. Increases in farm, fishing, and intermediate food products (8.5%) also partly offset declines in other import categories.

Services imports rose 1.8% in January, supported by strong growth in commercial services (4.1%), particularly financial services. Government services, while a small share of total services imports, increased for a 4^th straight month (3.1%). Meanwhile, travel (‑1.9%) and transportation services (‑0.7%) both declined for a second consecutive month.

Figure 3: Imports by industry and sector (monthly % change)

Note: Metal & non-metallic mineral products include intermediate or semi-finished products, while metal ores & non-metallic minerals include raw ores and minerals (e.g., iron ore, potash, stone).
Data: Statistics Canada Tables 12-10-0163-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada.

Global markets

After a modest rebound at the end of 2025, Canada’s goods trade with the U.S. weakened in January. Exports to the U.S. fell by 3.8%, reaching their lowest level since May 2025, while imports declined by 3.4%, narrowing Canada’s goods trade surplus with the U.S. to $5.4 billion.

Following a 5.8% increase in goods exports to non‑U.S. markets in December, exports declined by 6.5% in January, mainly reflecting a drop in shipments of unwrought gold to the United Kingdom. The prominence of gold makes Canada’s exports to the United Kingdom highly volatile; goods exports increased 39.3% in December before falling by 18.6% in January.

In contrast, goods imports from non‑U.S. markets increased by 2.1% in January, driven by higher imports of LNG industrial machinery from China. As a result, Canada’s goods trade deficit with countries other than the U.S. widened from $7.0 billion in December to $9.0 billion in January.

Figure 4: Goods trade by main markets (monthly % change)

Data: Statistics Canada Table 12-10-0011-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada.

Prices and volumes

January’s fall in goods exports was driven by a 5.8% drop in volumes, primarily led by a 22.6% decrease in motor vehicles and parts export volumes. Although export prices rose 1.2% this month, this increase did little to mitigate the substantial drop in volumes.

Goods imports also experienced a decline in volumes (-2.2%) but this was partially offset by the 1.2% rise in prices.

The Canadian dollar recorded a second consecutive, although modest, monthly increase in January, rising by 0.13 US cents to reach 72.58 cents. This marks the highest value of the Canadian dollar since July of last year.

Likewise, Western Canada Select, the benchmark price for western Canadian crude oil, also rose to US$47.22 per barrel, up 1.7% from December. This rebound in prices is expected to persist in coming months, underpinned by ongoing geopolitical tensions and uncertainties surrounding global oil supply.

Figure 5: Goods trade (monthly % change in volume and price indices)

Data: Statistics Canada Table 12-10-0168-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada.

Figure 6: Exchange rate & oil prices

Data: Bank of Canada, Government of Alberta.
Source: Office of the Chief Economist, Global Affairs Canada.

What to watch

• Canada’s real GDP expanded by 1.7% in 2025, its slowest growth rate since the 2020 pandemic downturn. Even so, the outcome slightly outperformed expectations in Bank of Canada’s April 2025 Monetary Policy Report, which had projected a “better‑case” scenario growth rate of 1.6% for the year.
• On a sectoral basis, Canada’s GDP in industries affected by U.S. tariffs decreased 4.0% in 2025, with the sharpest declines in aluminum (-15.5%) and motor vehicle body and trailer manufacturing (-11.6%).
• The Strait of Hormuz, a key corridor for energy exports, has faced significant disruptions due to military activity, contributing to higher natural gas and oil prices. As a net exporter of energy, higher prices for consumers of energy are likely to be offset by higher incomes for producers with the total economic impact for Canada being largely determined by the duration and extent of the shock.
• After a strong January, the U.S. labour market unexpectedly weakened in February with a net loss of 92,000 jobs, adding uncertainty to the Federal Reserve’s upcoming interest‑rate decision next week amid ongoing inflation concerns.
• China’s 5% growth in 2025 was driven largely by a record $1.2 trillion trade surplus. With a slower 4.5%–5% expansion targeted for 2026, the government plans to increase infrastructure investment and public services while promoting more balanced trade through expanded imports.

Next release: April 2, 2026.

Table 2: Trade by industry sector – January 2026

Note: “m/m %” is the change from the previous month; “YTD %” is the year-to-date (January to recent month) cumulative change compared to the same period in the previous year.
Data: Statistics Canada Tables 12-10-0163-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada

Table 3: Goods trade by main markets – January 2026

Notes: The Indo-Pacific region total includes only the 9 markets for which data are available. “m/m %” is the change from the previous month; “YTD %” is the year-to-date (January to recent month) cumulative change compared to the same period in the previous year.
Data: Statistics Canada Table 12-10-0011-01. Balance of payments basis, seasonally adjusted.
Source: Office of the Chief Economist, Global Affairs Canada