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By Promit Mukherjee
OTTAWA, April 2 (Reuters) - Canada’s merchandise trade deficit widened by a big margin in February, data showed on Thursday, as higher gold imports took the total imports to a record high, while exports could not match up even though it also rose sharply.
It was also the first time that Canada’s share of exports to the U.S. dropped to its lowest level of just over 66%, from 68% a month ago and over 79% a year ago when companies were front-loading goods due to incoming U.S. tariffs.
The trade deficit for February was at C$5.74 billion ($4.12 billion), following an upwardly revised C$4.18 billion in the prior month, Statistics Canada said.
Analysts polled by Reuters had forecast a deficit of C$2.25 billion, half of the actual number.
Total imports surged by 8.4% in February, StatsCan said, adding that it took the total value of imports to C$72.1 billion, an all-time high.
In volume terms, imports rose 7.1%, it said.
The jump in imports was led by a massive 45.6% jump in the imports of metal and non-metallic mineral products in February, especially led by purchases of gold in the U.S. by Canadian entities.
When a product exchanges hand from a foreign entity to a Canadian, even if it does not cross the border physically, it is considered an import on balance of payment basis. When a product physically enters a country, it is factored in imports on customs basis.
Other imports also aided to the surge with imports of motor vehicles and parts up 5.9% in February as production at Canadian auto plants came back online and sales stabilized.
Imports of energy products also increased 20.1% in February, StatsCan said.
Total exports in February rose 6.4%, rebounding from a decline in the previous month. Exports reached C$66.31 billion, the highest level since March 2025.
Once again, gold exports was one of the biggest contributors to the gains with exports of unwrought gold, silver, and platinum group metals, and their alloys rose 14.2%, driven by higher exports of unwrought gold to the U.K.
Owing to higher gold imports from the U.S, trade surplus with Canada’s neighbor narrowed to C$1.7 billion in February from C$4.9 billion in January, the smallest ever surplus since May 2020.
Exports to countries other than the United States rose 10.5% in February to reach an all-time high of C$22.3 billion, the statistics agency said, adding that this contributed to the share of exports to the U.S. falling to its lowest level ever.