Updated:
Canada’s merchandise-trade surplus widened to C$4.2 billion in August, its largest since May 2022, as exports rose and imports fell. Statistics Canada’s figures, released Tuesday, October 6, exceeded economists’ expectations of a C$1.55 billion surplus and reversed a sharp narrowing in July.
The increase was driven in part by a surge in shipments to the United States before new U.S. tariffs took effect late in August. The trade data therefore show a strong month for Canadian exporters, but may not yet reflect the full impact of the duties on cross-border commerce.
Exports rose while imports retreated
Canadian merchandise exports increased 2.5% in August to C$77.91 billion, while imports declined 2%, their first monthly fall in seven months, according to Statistics Canada data reported by Dow Jones. In volume terms, exports also rose 2.5%, while imports fell 1.1%.
The gains were broad, with exports increasing in eight of the 11 product categories tracked by the agency. Energy exports rose 4.7% to C$19.03 billion, the first increase since April, with refined petroleum products contributing to the advance. Excluding energy, exports grew a more modest 1.8%.
Consumer goods exports increased 6.6%, while shipments of industrial machinery, equipment and parts rose 10.1%. Electronic and electrical equipment and parts exports were up 11%. The fall in imports was led by motor vehicles and parts; excluding autos, imports decreased 0.5%.
U.S. shipments drove the sharpest swing
Exports to the United States rose 8.1% in August, while imports from the U.S. fell 2.5%. Canada’s merchandise-trade surplus with its largest trading partner consequently widened to about C$11.2 billion, the biggest positive monthly shift in the bilateral balance on record, Dow Jones reported.
The U.S. share of Canadian exports climbed to 69.8%, its highest level since September 2025. By contrast, exports to countries other than the United States dropped 8.5% from July, while imports from those markets fell 1.4%. Canada’s merchandise-trade deficit with non-U.S. partners widened to C$7.02 billion from C$5.27 billion.
The contrast with July was marked. Canada’s overall merchandise surplus had narrowed to C$787 million that month, after exports fell 2.3% and imports rose 2.2%; shipments to the U.S. dropped 6.6%. Exports to markets outside the U.S. had reached a record C$25.6 billion in July, a sign of the diversification effort that August’s reversal temporarily interrupted.
Tariff timing may have influenced trade
Washington announced plans in July for new 50% tariffs covering goods equivalent to about 5% of Canadian exports. The duties took effect on August 22 and applied to products including wine, furniture, dairy goods, cement, clothing, fishing equipment and hockey equipment, Reuters and Dow Jones reported.
Reuters reported that Canadian exporters accelerated shipments ahead of the changes, while Dow Jones said U.S. importers may also have brought forward purchases to avoid additional costs. Those explanations point to tariff-related timing as a possible factor behind August’s jump; the monthly figures alone do not establish how much of the increase resulted from stockpiling rather than underlying demand.
Ottawa announced counter-tariffs on selected U.S. goods at the end of August, according to Dow Jones. Statistics Canada’s July report had already cautioned that August trade data were due on October 6, while the new U.S. measures were not in force for most of the month. The next month’s figures will provide a fuller observation period after the duties began.
Goods-and-services balance also widened
When trade in services is included, Canada’s overall trade surplus expanded to C$4.63 billion in August from C$988 million in July. Exports of goods and services rose 2.1% month over month, while imports fell 1.7%, Dow Jones reported.
The strong August result follows a sharp second-quarter rebound in goods trade. Statistics Canada reported that goods exports rose 13.1% in the quarter, led by energy products, and the goods balance shifted to a C$12.2 billion surplus from a C$6.4 billion deficit in the first quarter. Whether August’s large surplus persists will depend on trade flows in the months after the tariff changes; the available reports do not establish what the next release will show.
