Canada’s export gains are real, but mostly thanks to gold
October trade data shows exports to non‑U.S. markets rose to 33%, but most of the increase reflects soaring gold prices, not broad diversification.
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By Torontoer Staff
Canada’s exports to destinations outside the United States jumped to 33 per cent in October, up from less than a quarter of business earlier in 2024. On the surface the shift looks like progress toward the federal government’s goal of doubling non‑U.S. exports within a decade.
Most of that advance is a price story. A sharp run in gold prices has driven the value of precious metal shipments higher, making trade statistics appear stronger than they are in volume terms.
The numbers behind the lift
Gold prices have surged roughly 70 per cent since January. That spike pushed precious metals to about 13 per cent of Canadian exports in October, the highest share on record and ahead of oil and autos. Gold shipments rose 47.4 per cent in October after a near 33 per cent increase in September.
National Bank of Canada analysis shows roughly 60 per cent of October’s export gain was due to higher prices. Volumes also rose, by about 40 per cent year over year, but price effects dominate the headline numbers.
Why gold distorts the trade picture
Economists warn the gains are misleading when the goal is genuine trade diversification. National Bank economists Ethan Currie and Stefan Marion say the rise in non‑U.S. export shares is “predominantly a function of price impacts,” and that underlying, volume‑based diversification may not be making the strides the aggregate data suggest.
That is then predominantly a function of price impacts … suggesting that true, volume‑based trade diversification away from the U.S. is perhaps not making the strides it appears to be on the surface.
Ethan Currie and Stefan Marion, National Bank of Canada
The merchandise trade balance swung from a surplus in September to a $0.58 billion deficit in October, a narrower shortfall than economists expected. National Bank senior economist Jocelyn Paquet calculates that without gold the deficit would have been roughly $8.2 billion, not $0.58 billion.
Therefore, it is fair to say that the explosion in prices and demand for the precious metal is partly masking the effects of tariffs imposed by Washington in the trade data.
Jocelyn Paquet, National Bank of Canada
Policy implications and CUSMA renegotiation
Canada’s stated aim of reducing reliance on the U.S. market will be harder to achieve if much of the improvement in export values is price driven. Economists say sustained diversification requires renewed business confidence, private capital investment, and predictable trade rules.
Longer‑run, effective, and sustained trade diversification … can not properly materialize in the absence of a renewed, confidence‑bolstering deal, and the associated private capital investment.
Ethan Currie and Stefan Marion, National Bank of Canada
The Canada‑United States‑Mexico Agreement is up for renegotiation this year. Political rhetoric from Washington has been tense, and that uncertainty increases the value of keeping preferential market access in place while Canada pursues diversification.
What the mining boom means for jobs and production
The gold rally is helping Canada’s mining sector hit records in revenue and employment. Mining and quarrying employment reached about 100,000 workers, and the sector’s jobless rate sits around 2.6 per cent, well below the national industry average.
Those gains come with constraints. The Mining Industry Human Resources Council warns skilled labour shortages are already slowing output and delaying projects.
In the next 10 to 20 years, we’re going to want to expand significantly, but we’re going to come up against this labour constraint, which is already being felt. And it’s going to get worse.
Gustavo Jurado, senior economist, Mining Industry Human Resources Council
- Precious metals reached about 13 per cent of exports in October, a record high.
- Gold prices are up roughly 70 per cent since January, accounting for most of the export value gain.
- Without gold, international shipments would have fallen about 2.5 per cent in October.
- Merchandise trade would have shown a much larger deficit in October without gold.
Where this leaves Canada
Gold has provided a near‑term cushion for export numbers and corporate earnings, and it will remain important as long as prices hold. At the same time, policymakers and business leaders should treat the recent data as a reminder that value gains tied to a single commodity do not substitute for broader, durable trade links.
If Canada wants real diversification, it will need continued investment, a steady supply of skilled workers in key sectors, and a trade environment that reduces uncertainty for exporters. Until those pieces are in place, the headline improvement in non‑U.S. export shares looks like a partial victory at best.
tradegoldminingeconomyCUSMA
