Ottawa: Canada posted a trade surplus of C$5.35 billion (about US$3.83 billion) in September, the highest since May 2022, Statistics Canada data showed on Wednesday, helped by gold and higher energy exports primarily to the United States. Analysts polled by Reuters had forecast a surplus of C$4.10 billion, after an upwardly revised C$4.95 billion surplus in August — making September the seventh straight monthly surplus.
Source: Reuters
Higher shipments of gold and energy south of the border increased exports to the US by 0.7% in September, widening Canada's surplus with its biggest trading partner to C$12.33 billion, the highest since the start of 2025, before President Trump's initial tariffs were imposed. The share of Canada's exports headed to the US exceeded 70% for the first time in 13 months. Total exports edged up 0.2% to C$78.55 billion, a fresh record, while imports slipped 0.3% to C$72.3 billion.
Source: Dow Jones Newswires
Gold and energy did the heavy lifting
Exports of metal and non-metallic mineral products increased 8.6% in September, led by unwrought gold, which surged 16.8% and contributed the most to the monthly gain, as American buying of Canadian-held gold more than made up for lower shipments to the United Kingdom. Energy product exports jumped 8.2%, with higher crude oil and bitumen shipments and higher prices, and natural gas exports soared as the liquefied natural gas facility on Canada's west coast continued to ramp up. Reuters noted the war in Iran has also helped Canadian export revenue through higher crude prices.
Source: Reuters
Under the headline, tariffs are biting
Excluding gold and energy, Canada's exports dropped 5.6% in September, and export volumes overall fell 4%. Shipments declined in eight of the 11 product categories Statistics Canada tracks — consumer goods, electronic and electrical equipment and parts, industrial machinery, motor vehicles and parts, and forestry products were all down. September was the first full month since the US imposed new 50% tariffs on roughly 5% of Canadian exports after trade talks collapsed; Ottawa retaliated with levies on a similar share of US trade.
Source: Dow Jones Newswires
"The pullback in non-energy exports and total trade in volume terms confirms that August data may have been flattered by tariff front-running, and that new US tariffs are having a negative impact on the economy," said Andrew Grantham, senior economist at CIBC Capital Markets. Vincent Chartray, an economist at KPMG Canada, said: "Strength in the energy sector helps cushion softer manufacturing exports, but trade uncertainty will continue to weigh on exports and slow investment." Bank of Canada Governor Tiff Macklem told lawmakers on Tuesday that growth is likely to slow in the final quarter as the new tariffs weigh, before picking up again in 2027; the Bank of Canada raised its policy rate by a quarter point last week, its first increase since July 2023.
Source: Dow Jones Newswires
Ottawa: midterms change nothing; talks go on
Canada-US Trade Minister Dominic LeBlanc said on Wednesday that the US midterm results — in which Democrats seized control of both the Senate and the House of Representatives — would not change Ottawa's stance toward trade talks with the US. "To a certain extent last night's results are interesting, but they will not have any significant impact in terms of our government's focus and work," LeBlanc told reporters, adding he planned to speak to US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer over the next few days. The Canadian Press reported LeBlanc saying recent talks with the Trump administration have been productive, while formal trade talks have been stalled since Canada walked away from negotiations in Washington in August; Prime Minister Mark Carney said on Tuesday that official trade discussions had been taking place in recent days. Reuters reported Trump said on Tuesday the US was close to a trade deal with Canada, while Carney said work remained to be done and that Washington had dropped some demands. Conservative Leader Pierre Poilievre said the midterm outcome "demonstrates that Americans hate tariffs" and urged Carney to push for tariff-free trade.
Source: The Canadian Press
Markets took the data in stride: the Canadian dollar was trading 0.57% higher at C$1.3930 to the US dollar, or 71.79 US cents, and yields on Canada's two-year government bonds were down 0.8 basis point to 2.656%. What happens next turns on the LeBlanc-Lutnick-Greer calls and whether the intensified deal talks produce an agreement that removes the new tariffs now squeezing Canada's non-energy exporters.
Source: Reuters