Canada: Wider Trade Surplus Masks Slowing Trade in September November 4, 2026

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.