Higher Energy, Gold Exports Offset US Tariff Impact on Canada

Canada’s overall trade surplus widened to C$5.35 billion in September 2026, reaching its highest level since May 2022, according to data released by Statistics Canada. The robust figures significantly outpaced analyst forecasts compiled by Reuters and Bloomberg. The growth was propelled by higher shipments of energy and precious metals that absorbed the shock of new trade levies imposed south of the border.

The report provided the first full month of trade data since the United States administration deployed Section 338 tariffs on billions of dollars worth of Canadian merchandise. The measures followed the collapse of trade talks. Exports declined in eight out of eleven product sections, with Statistics Canada noting that consumer goods, electronic equipment, parts, and industrial machinery suffered notable contractions. Total exports also decreased by four per cent in volume terms, marking the largest percentage decline since January 2026.

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Even so, soaring global commodity values counterbalanced the restrictive duties. Energy exports jumped by 8.2 per cent, bolstered by crude oil and bitumen pricing driven higher by geopolitical tensions, including conflict involving Iran. Meanwhile, metal and non-metallic mineral products climbed 8.6 per cent, powered by a surge in unwrought gold purchases by US residents, which surged 16.8 per cent and contributed the most to the monthly gain.

The reliance on the North American neighbour remained profound. Exports heading south of the border rose by 0.7 per cent, primarily on higher shipments of crude oil and unwrought gold. Concurrently, imports from the US grew by 0.4 per cent, partly on higher shipments of processing units. This widened Canada's bilateral trade surplus with the US to C$12.3 billion, up from C$12.1 billion in August. Statistics Canada reported that the share of Canadian shipments bound for the US climbed past 70 per cent for the first time in 13 months.

Yet in September 2026, shipments to countries outside the US slipped 1.1 per cent, marking the second consecutive decline after reaching a record high in July. The drop was impacted by lower gold exports to the United Kingdom, lower coal and wheat deliveries to Japan, and reduced diesel and wheat shipments to Peru, though these were partially offset by higher exports of copper, coal, and crude oil to South Korea. Imports from countries other than the US also decreased by 1.4 per cent, amid lower imports from China, Japan, and Mexico driven mainly by passenger vehicles and light trucks.

Total Canadian imports decreased by 0.3 per cent in September, with motor vehicles and parts posting the largest decline, falling by 9.1 per cent as supply issues caused unplanned work stoppages in the US. Excluding that product section, imports increased by 1.5 per cent, and total imports declined by 2.5 per cent in volume terms.

By autumn, the Canadian dollar recovered slightly, trading 0.57 per cent higher at C$1.3930 to the US dollar (or 71.79 US cents), while yields on Canada’s two-year government bonds edged down 0.8 basis point to 2.656 per cent. Meanwhile, domestic investments found support in technology infrastructure; analysts previously noted that past import increases in computers and peripherals were tied to artificial intelligence data centres under construction nationwide, signaling robust domestic capital expenditure.

Attention now turns to the negotiating table. The new tariffs were slapped on Canadian exports after trade talks collapsed and following mid-term elections where the Republican party lost control of both chambers of Congress. Both nations have since indicated that talks for a renewed trade agreement have intensified.