Statistics Canada says the country's merchandise trade deficit with the world shrank to $984 million in February from $1.5 billion in January.
Economists had expected a deficit of $2 billion, according to Thomson Reuters.
Statistics Canada revised its January figure — originally reported as $2.5 billion — because estimates of energy products and special transactions trade imports were replaced with administrative and survey data as they became available.
The federal agency says the deficit for February narrowed as exports rose 0.4 per cent and imports fell 0.7 per cent.
Imports from the United States were down 1.2 per cent to $29.8 billion in February, while exports rose 1.1 per cent to $32.8 billion, widening Canada's trade surplus with that country to $2.9 billion in February from $2.2 billion in January.
Exports to other countries fell 1.5 per cent to $10.8 billion in February, while imports rose 0.3 per cent to $14.7 billion, widening the trade deficit with the rest of the world to $3.9 billion in February from $3.7 billion in January.