Economic reports: 1)2026 10th Annual Ontario Economic report; 2)Statistics Canada reports merchandise trade deficit $1.3B in December; 3)Rising Unwrought Gold Exports Behind the Trade Balance Improvement

1)2026 10th Annual Ontario Economic report

Courtesy of Ontario Chamber of Commerce (and the Barrie Chamber of Commerce), February 19, 2026

Business confidence in Ontario remains low but steady after the first full year of tariff impacts, according to the Ontario Chamber of Commerce’s (OCC) 10th annual Ontario Economic Report.

Today, the OCC released its flagship, evidence-based assessment of Ontario’s economy, combining its annual province-wide Business Confidence Survey with forward-looking analysis.

Top 3 key findings:

1. Business confidence sits at 23 per cent, signalling resilience but not recovery; 52 per cent are not confident in Ontario’s economic outlook
2. Rising costs remain the top barrier to investment, with concerns related specifically to input costs, prompting many firms to pause or scale back capital projects
3. Simplified and lower taxes, stable regulation and clear long-term policy signals are seen as essential to attracting domestic and international investment

To read the full report, go to: https://occ.ca/interactive-oer2026/

2)Statistics Canada reports merchandise trade deficit $1.3B in December

Courtesy Barrie360.com and Canadian Press

By Canadian Press Staff, February 19, 2026

Statistics Canada says the country’s merchandise trade deficit narrowed in December to $1.3 billion as growth in exports outpaced a rise in imports.

That compared with a revised deficit of $2.6 billion for November, which was initially reported at $2.2 billion.

For December, total exports rose 2.6 per cent to $65.6 billion, boosted by an 18 per cent increase in the metal and non-metallic mineral products group, which includes unwrought gold, silver, and platinum group metals, and their alloys — a category largely composed of unwrought gold.

Excluding the metal and non-metallic mineral products group, exports edged down 0.2 per cent in December.

Total imports rose 0.6 per cent in December to $66.9 billion as imports of motor vehicles and parts gained 5.1 per cent for the month.

In volume terms, both exports and imports rose 1.4 per cent for the month.

Looking through the volatile components that drove the headline numbers for the month, the big picture is that export demand appears to remain weak, said Alexandra Brown, North America economist at Capital Economics.

“The majority of other categories posted monthly declines, including metal ores and non-metallic minerals, chemicals, forestry products, industrial machinery, electronic and electrical equipment and consumer goods,” she wrote.

“Canada continues to have some success with gradually recalibrating towards non-U.S. trade partners, as exports to countries other than the U.S. once again reached a record high. However, this was mainly due to a pick up in the value of gold shipments to the U.K., which is unlikely to be sustained in coming months.”

Canada’s merchandise trade surplus with the U.S. was $5.7 billion in December compared with $6.5 billion in November as exports to the U.S. rose 1.1 per cent, while imports increased 3.5 per cent.

Meanwhile, exports to countries other than the U.S. hit a record high as they increased 5.8 per cent in December, while imports from countries other than the U.S. fell 3.0 per cent. Canada’s trade deficit with countries other than the U.S. was $7.0 billion in December compared with $9.0 billion in November.

For the full year, Canada posted a trade deficit of $31.3 billion, the largest deficit since 2020 as exports edged down 0.2 per cent, while imports increased 2.8 per cent.

Canada’s trade surplus with the U.S. was $81.6 billion for the year, down from $101.3 billion in 2024, as exports to the U.S. fell 5.8 per cent, while imports from the U.S. decreased 2.9 per cent.

TD Bank economist Marc Ercolao said the review of the trade agreement between Canada, the United States and Mexico will be in full focus over the coming months.

“While the base case is that the agreement remains in place, scenarios involving U.S. withdrawal could expose Canadian exporters to significantly higher tariffs and prolonged policy uncertainty, weighing on business confidence and investment,” Ercolao wrote in a report.

“The pending U.S. Supreme Court ruling on the legality of IEEPA tariffs could also affect potential outcomes.”

3)Rising Unwrought Gold Exports Behind the Trade Balance Improvement

Courtesy Signal 49 Research (formerly the Conference Board of Canada)

Canada’s merchandise exports increased 2.6 per cent (month-over-month) in December 2025. Meanwhile, imports were up 0.6 per cent. As a result, Canada’s merchandise trade deficit narrowed from $2.6 billion in November to $1.3 billion in December.

Exports rose to $65.6 billion in December. Gains were recorded in 7 of 11 product categories. Exports of metal and non-metallic mineral products (+18.0 per cent) posted the largest increase, followed by exports of aircraft and other transportation equipment and parts (+20.5 per cent). On the other hand, lower exports of forestry products (-4.6 per cent) and energy products (-1.0 per cent) offset some of the monthly gains. In volume terms, total exports were up 1.4 per cent.

Imports climbed to $66.9 billion in December. Overall, increases were recorded in 6 of 11 product categories. The main contributors to the monthly increase were imports of motor vehicles and parts (+5.1 per cent), as well as imports of metal and non-metallic mineral products (+7.7 per cent). Partially offsetting the monthly gains was the 4.5 per cent drop in imports of consumer goods, as well as the 4.7 per cent decline in imports of basic and industrial chemical, plastic and rubber products. In volume terms, total imports increased 1.4 per cent.

Canadian exports to the U.S. rose 1.1 per cent in December, partially offsetting declines recorded in the previous two months. Meanwhile, imports from the United States rose by 3.5 per cent. As a result, the merchandise trade surplus with the United States narrowed from $6.5 billion in November to $5.7 billion in December.

Key insights

Movements in the Canadian dollar, together with fluctuations in precious metal markets, influenced trade activity in December. Exports of metal and non-metallic mineral products rose 18.0 per cent month-over-month, led primarily by unwrought gold, silver, and platinum, reflecting higher shipments to the United Kingdom, the U.S., and Australia. On a year-over-year basis, exports of these metals and their alloys surged 41.7 per cent in 2025. On the imports side, unwrought gold, silver, and platinum group metal shipments into Canada also increased sharply, rising 53.5 per cent in December. Meanwhile, the Canadian dollar strengthened against the U.S. dollar during the month, which reduced trade values when measured in Canadian dollars. In U.S. dollar terms, Canadian exports and imports were up 4.5 per cent and 2.4 per cent, respectively.

Near-term trade prospects remain uncertain. After a sharp 12.4 per cent decline in exports during the second quarter of 2025, nominal exports rebounded by 2.2 per cent in Q3 and 3.9 per cent in Q4. While these recent quarterly gains point to some resilience amid U.S. tariff pressures, overall exports for the year were down 0.2 per cent. The apparent strength has been largely driven by shipments of unwrought gold, obscuring underlying weakness in core trade flows. When excluding gold and price effects, the trade outlook appears subdued. Downside risks remain elevated given ongoing uncertainty surrounding U.S. trade policy and the softening U.S. economic environment.

Canada looks to shift trade away from the United States. Prime Minister Mark Carney’s visit to China last month resulted in a rollback of tariffs between the two countries, representing a notable shift in trade policy after several years of escalating tensions. Building on recent agreements with partners such as Indonesia and Germany, this development underscores Ottawa’s efforts to broaden trade partnerships and reengage with markets where relations had previously been strained. Rather than relying on a potential breakthrough deal with the United States, which may be out of reach, Canada is actively pursuing diversification of its trade relationships. This strategy will be critical for enhancing the resilience of Canadian trade going forward.

Canada in a Changing World

The relationship between Canada and the United States is being reset. During this time of uncertainty, Signal49 Research is examining what Canada must do to not just survive but thrive in this changing world. We will look at what is required to expand our national security capabilities, build our economic resilience, address our domestic priorities, and reimagine how we engage with the rest of the world.

For more details about the impact of U.S. tariffs and our research on Canada’s place in a changing world, please read more: Re-Investing in Canada: Strategies for Long-Term Prosperity

Webinar link: https://www.youtube.com/watch?v=6YaP61-EQBY

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