OTTAWA, September 3, 2026, 13:30 (EDT) – Canada’s trade surplus narrowed by 82%, while its currency advanced 0.5% on the day.
- Canada posted a goods surplus of C$769 million in July, down from C$4.2 billion previously.
- Exports fell by 2.3%, whereas imports climbed 2.2%, marking the sixth consecutive monthly rise.
- The Canadian dollar rose 0.47% to C$1.3776 against the U.S. dollar as of 13:23 EDT.
Canada’s merchandise trade surplus narrowed by 82% in July. The balance reached C$769 million, falling short of the C$3.57 billion consensus by C$2.8 billion Statistics Canada; Reuters.
The currency shifted in the opposite direction. This divergence indicates that traders are prioritising oil prices, interest rates and broader global dollar flows over a single historical trade figure.
Canadian dollar strengthens after the 08:30 trade release
USD/CAD; a lower rate means a stronger Canadian dollar.
Exports dropped to C$76.1 billion, breaking a streak of five consecutive monthly increases. Imports increased for a sixth straight month, reaching C$75.4 billion. The combination narrowed the trade surplus.
July’s surplus was one-fifth of June’s
Canadian merchandise trade balance, C$ billions.
Energy exports slipped by 4.4%, with crude oil falling 5.6%. Metal and mineral products were down 8.5%. The decrease was mainly led by these two sectors.
On the other hand, exports to destinations outside the United States climbed 7.4% to a record C$25.6 billion. The increase was mainly driven by aircraft shipments and agricultural products.
U.S. share falls as other destinations set a record
Share of Canadian merchandise exports by destination.
Export Development Canada’s chief economist, Stuart Bergman, described the U.S. share falling below 70% as a positive sign. “Sheer gravity alone pulls exporters to the U.S. market,” he told Reuters.
The progress remains partial. Canada’s trade surplus with the U.S. dropped nearly by half to C$5.9 billion. Exports to the south decreased by 6.6%, as imports increased by 1.8%.
Imports of vehicles and parts surged 11.4% to an all-time high. The increase was partly due to a decrease in typical seasonal factory shutdowns. This also contributed to a broader goods deficit.
The Bank of Canada kept its overnight rate steady at 2.25% on Wednesday, stating that new tariffs have heightened uncertainty for growth and that inflation risks have escalated Bank of Canada.
Bond market valuations reflect this caution. On September 2, Canada’s two-year yield ended the session at 3.11%. The 10-year yield settled at 3.80%, rising five basis points on the day official yield data.
Risks: Fluctuating oil prices can rapidly alter energy export levels. Additional tariffs could simultaneously reduce export volumes and increase import expenses.
August trade figures are due on October 6, with the subsequent rate decision set for October 28. Both will gauge if diversification is enough to balance out a reduced U.S. surplus.
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