Canada's Trade Surplus Widens as Oil, Gold Drive Record Exports — 2nd Update

By Robb M. Stewart

OTTAWA--Canada's goods-trade surplus with the world widened to a more than four-year high in September as elevated oil prices and U.S. gold purchases drove exports to a fresh record and countered the squeeze from another round of American tariffs.

The country recorded a merchandise-trade surplus of 5.35 billion Canadian dollars, the equivalent of about $2.82 billion, Statistics Canada said Wednesday.

That was the widest since May 2022, and a seventh straight surplus after August's balance grew to an upwardly revised C$4.95 billion.

Exports edged up 0.2% to C$78.55 billion, with exports to the U.S. up 0.7% but down a second month running to all other countries combined after hitting a record in July. The overall value of imports slipped 0.3% to C$72.3 billion even with a rise in inbound shipments of the type of processing units used in data centers.

The rise in exports was narrow and owed much to higher prices. Shipments declined for eight of the 11 product categories tracked by the national data agency, and exports excluding energy and metals and mineral products were down 5.6% for the month. In volume terms, exports as a whole retreated 4%.

"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 U.S. tariffs are having a negative impact on the economy," said Andrew Grantham, senior economist at CIBC Capital Markets.

That doesn't bode well for the contribution exports will make in the final quarter of the year, when the economy is already expected to feel the strain of heightened trade tensions. September marked the first full month since the U.S. imposed new 50% tariffs on the equivalent of roughly 5% of Canadian exports and Ottawa retaliated with levies on a similar share of U.S. trade.

Canadian exports of energy products rose a second consecutive month in September, increasing by 8.2% with a jump in shipments of crude oil and bitumen and higher prices. Exports of natural gas also soared for the month as the liquefied natural gas facility on the country's west coast continued to ramp up.

An increase in buying of Canadian-held unwrought gold by Americans drove a sharp rise in precious metals exports, and more than made up for lower shipments of gold to the U.K.

Still, exports of consumer goods, electronic and electrical equipment, industrial machinery and parts, motor vehicles and parts, and forestry products and building and packaging materials all were down. Statistics Canada noted this included several products targeted by the new U.S. tariffs that were up strongly in August ahead of the latest U.S. tariffs.

Exports to the U.S. rose a second month running, increasing 0.7% from the month before thanks mainly to deliveries of crude oil and gold. Imports from Canada's biggest trading partner were up 0.4%, led by processing units. That widened Canada's longstanding surplus with its neighbor slightly to C$12.33 billion, the highest since the start of 2025 before President Trump's initial tariffs were imposed.

Exports to countries other than the U.S. dropped by 1.1% in September, a second straight pullback from a record high in July, while imports from non-U.S countries declined 1.1%, mainly with a fall in inbound passenger cars and light trucks. Canada's trade deficit with countries beyond the U.S. narrowed to C$6.98 billion from C$7.12 billion the month before.

Bank of Canada Gov. Tiff Macklem on Tuesday told lawmakers economic growth is likely to slow in the final quarter as the new tariffs weigh on activity, but then pick up again in 2027 as exports increase, consumer spending continues, and business investment strengthens.

Early data indicate gross domestic product is tracking growth of about 1.3% on an annualized basis in the third quarter, lagging the 2% expansion the central bank has forecast. The Bank of Canada last week raised its policy interest rate a quarter percentage point, the first increase since July 2023, amid worries about the outlook for inflation.

"Strength in the energy sector helps cushion softer manufacturing exports, but trade uncertainty will continue to weigh on exports and slow investment," said Vincent Chartray, economist at KPMG Canada. "Greater clarity or, better yet, progress toward a deal with the U.S. would support a broader recovery in exports and investment as confidence is restored for both businesses and consumers."

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

November 04, 2026 11:36 ET (16:36 GMT)