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Economic News

Canada: Wider Trade Surplus Masks Slowing Trade in September

November 4, 2026
Nom du rédacteur
Laura Gu
Senior Economist

Highlights

  • Canada’s international merchandise trade surplus increased to $5.4B in September 2026 from an upwardly revised $5.0B in August (graph 1). This was above the consensus expectation for a $5B surplus. See table for more details.
  • Goods exports edged up 0.2% m/m, but volumes fell 4.0%. Imports were down 0.3%, with volumes falling 2.5%.
  • Canada’s trade surplus with the United States widened from $12.1B to $12.3B in September (graph 2). Meanwhile, the trade deficit with countries other than the US narrowed slightly from $7.1B to $7.0B.
  • The services trade surplus fell to $0.3B in September from a revised $0.45B in August. Exports of services rose 0.9% m/m while services imports were up 1.5% in the month.

Comments

September’s trade surplus beat expectations and marked a seventh consecutive monthly surplus. But trade is losing steam, with exports and imports both shrinking in real terms. Prices did the heavy lifting.

Outside of energy and metals, exports fell by 5.6%. Only three of the 11 export categories posted gains, and two carried the month. Energy exports jumped 8.2%, led by crude oil and bitumen (+10.2%) on higher prices. Metal and mineral products rose 8.6% as US buyers scooped up Canadian-held gold. Goods affected by the new Section 338 tariffs, which surged in August ahead of the deadline, reversed course: electronic and electrical equipment (-13.9%), industrial machinery (-9.0%), forestry and building materials (-9.8%), and consumer goods (-7.1%).

Imports fell for a second straight month, driven by motor vehicle and parts, which dropped 9.1% as supply problems idled US assembly lines. Excluding autos, imports rose 1.5%. Electronic and electrical equipment imports hit a record (+10.3%), as data-centre processors from the US pushed computer imports up 29.4%. That could be a constructive sign for tech investment.

Net trade should add to Q3 growth, but because of weaker domestic demand, not stronger exports. Nominal exports and imports both edged up 0.2% q/q, leaving the surplus steady at $11.2B. In real terms, exports slipped 0.6% while imports fell 1.6%.

The diversification story paused, albeit largely due to volatility in crude oil and gold. Exports to non-US markets fell for a second month, and their share of total exports eased to 29.8% from 30.1% (graph 3), though it remains well above the roughly 25% seen prior to 2025. On the import side, the gap between US and non-US sourcing remains relatively steady.

Implications

September’s wider trade surplus masks slowing trade on both sides of the ledger. Our Q3 estimate for real GDP growth sits around 1.5% annualized, short of the 2.0% in the Bank of Canada's October Monetary Policy Report. A softer Q3 is unlikely to knock the BoC off course. Policymakers are bracing for high energy prices to spill into core inflation, with measures excluding food and energy moving toward 3% next year. If the outlook stays close to the October projections, we expect another 25-basis point hike in December, taking the policy rate to 2.75%.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.