Canadian Merchandise Trade (September 2026)

Canada's Trade Books Post Widening Surplus in September

• Canada's trade surplus widened to $5.0 billion in September from $4.2 billion the prior month, marking a seventh consecutive monthly surplus.
• Exports in September eked out a 0.2% month-on-month (m/m) gain, following August's robust increase. Compositionally, the gain was entirely driven by an 8.2% m/m increase in energy products exports and a 16.8% m/m increase in metal and non-metallic minerals (mainly gold). Excluding these product groups, exports fell by over 5% m/m with notable declines in consumer goods (-7.1% m/m), electronic and electrical equipment (-13.9% m/m) and motor vehicles and parts (-4.9% m/m).
• Meanwhile, goods imports fell for a second consecutive month in September by 0.3% m/m. The retracement was narrowly-based, with imports of motor vehicles and parts declining by 9.1%, a second consecutive near-double-digit drop. The headline decrease was mostly offset by a 10.3% m/m increase in electronic and electrical equipment imports.
• In volume terms, total exports were down by 4.0% m/m while imports fell by 2.5% m/m. 
• Canada's merchandise trade surplus with the United States widened to $12.3 billion in September from $12.1 billion last month. Exports to non-U.S. destinations fell by 1.1% m/m after reaching a recently reaching record highs in July.

Key Implications

• September’s trade report showed some cooling from August’s strong performance. Higher oil prices helped lift total nominal shipments, but volumes were mostly down across the board. Some of the giveback reflects an unwinding of purchases brought forward by U.S. firms ahead of the August 22 tariffs, though broader product-level volatility also remains at play. With the full quarter of data now in hand, net trade should provide only a modest tailwind to Q3 real GDP growth.
• More recently, trade talks with the U.S. have taken a step in the right direction offering some encouragement following the breakdown in negotiations in August. However, much more work is needed to iron out a finalized trade agreement, which is likely to keep bilateral flows volatile in the months ahead. Until there is greater policy clarity, trade uncertainty will continue to weigh on business confidence, investment, and hiring, posing downside risks to near-term Canadian growth.
   

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