Canada’s international trade dynamics saw a positive shift as September marked the first monthly trade surplus in recent times, following a streak of seven consecutive deficits. Statistics Canada reported a modest surplus of $153 million, contrasting with the previous month’s deficit of $6.43 billion. This turnaround comes after a period of trade challenges stemming from tariffs imposed by U.S. President Donald Trump, impacting key sectors and restricting exports to Canada’s primary trading partner, the United States.
Notably, the surplus was largely bolstered by a substantial 44% increase in Canada’s trade surplus with the U.S., as per Statistics Canada data. The delay in releasing September’s trade data was attributed to the U.S. government shutdown, which hindered access to information on Canadian exports to the U.S. Analysts, who had projected a deficit of $4.5 billion, highlighted that the trade figures indicate a potential normalization in Canada’s international merchandise trade.
Prince Owusu, a senior economist at Export Development Canada, described the overall trend as optimistic, suggesting a stabilization in trade flows with the U.S. and an ongoing diversification effort away from American markets. September witnessed a 6.3% growth in Canada’s total exports, reaching $64.23 billion, driven by increased exports in nine out of 11 product categories. This surge, the most significant since February 2024, was spearheaded by a 4.6% rise in exports to the U.S. and an 11% growth in exports to other countries.
Key sectors such as metal and non-metallic mineral products, as well as aircraft and transportation equipment and parts, experienced notable export gains, with total exports in volume terms rising by 4.1%. Conversely, total merchandise imports decreased by 4.1% to $64.08 billion in September. Notably, exports to the U.S. climbed to $45.84 billion in August from $43.83 billion, with aircraft, light trucks, and unwrought gold driving the increase.
While the U.S. remained the destination for over 71% of Canada’s exports in September, imports from the U.S. recorded a third consecutive monthly decline at 1.7%. Meanwhile, higher shipments of unwrought gold, crude oil, and aircraft fueled the surge in exports to countries beyond the U.S., even as imports from these nations dropped by 7.3%. Canada’s trade deficit with non-U.S. countries notably narrowed, marking the lowest deficit since October 2024.
The Canadian dollar saw a slight strengthening against the U.S. dollar in early trading, gaining 0.2% to 1.3767, equivalent to 72.64 U.S. cents. Concurrently, yields on two-year government bonds dipped by 0.2 basis points to 2.524%.