Canada’s international trade landscape saw a positive shift in September, with the country recording a modest trade surplus of $153 million, as per data released by Statistics Canada on Thursday. This marked a departure from the previous seven months of deficits, including a substantial $6.43 billion deficit in the prior month.
The newfound surplus is significant as it comes on the heels of challenges posed by U.S. tariffs on key sectors, which had hindered Canada’s exports to its largest trading partner. Notably, a substantial portion of the surplus was attributed to a notable 44% increase in Canada’s trade surplus with the U.S.
The delayed release of the September trade data, originally scheduled for November, was due to a 43-day U.S. government shutdown, impeding the availability of information on Canadian exports to the U.S. Economic analysts had anticipated a trade deficit of $4.5 billion for the month, making the actual surplus a positive surprise.
Economists view the latest trade figures as a sign of normalization in Canada’s international merchandise trade. Export Development Canada’s senior economist, Prince Owusu, highlighted the encouraging trend of trade stabilization with the U.S. and the ongoing diversification of trade away from the U.S.
In September, Canada’s total exports surged by 6.3% to $64.23 billion, rebounding from a 3.2% decline in August. This growth was fueled by increased exports across nine out of eleven product categories, representing the most substantial percentage increase since February 2024. Notably, exports to countries beyond the U.S. experienced an 11% growth, indicating a positive trend in diversification efforts.
Leading the export gains were metal and non-metallic mineral products, as well as aircraft and transportation equipment and parts, which witnessed over a 20% rise in exports. Furthermore, total export volume increased by 4.1% during the same period.
On the import front, total merchandise imports decreased by 4.1% to $64.08 billion in September. Notably, exports to the U.S. saw growth from $43.83 billion in August to $45.84 billion in September, driven by categories such as aircraft, light trucks, and unwrought gold.
The U.S. remained Canada’s primary export destination, constituting over 71% of total exports in September. Meanwhile, imports from the U.S. experienced a third consecutive monthly decline of 1.7%, resulting in Canada’s highest trade surplus with the U.S. since February.
Increased shipments of unwrought gold, crude oil, and aircraft were the primary drivers of export growth to countries other than the U.S., while imports from non-U.S. nations decreased by 7.3%. Notably, Canada’s trade deficit with countries outside the U.S. narrowed significantly to its lowest level since October 2024.
The Canadian dollar strengthened in early trading, appreciating by 0.2% to 1.3767 against the U.S. dollar, equivalent to 72.64 U.S. cents. Concurrently, yields on the two-year government bonds experienced a slight decline of 0.2 basis points to 2.524%.
Overall, the recent trade data portrays a positive outlook for Canada’s international trade, showcasing a rebound in exports and a shift towards a more balanced trade landscape.