OTTAWA — Canada’s merchandise trade surplus climbed to C$4.2 billion in August 2026, its highest level in more than four years, as exports increased and imports declined amid changing trade conditions with the United States.
Figures released by Statistics Canada on October 6 showed that the surplus rose sharply from C$787 million in July, marking the country’s sixth consecutive monthly surplus in merchandise trade.
Canadian exports increased by 2.5% to C$77.9 billion, while imports fell by 2% to C$73.7 billion. The decline in imports was the first recorded since January.
A significant part of the improvement came from stronger trade with the United States, Canada’s largest export market.
Exports to the U.S. surged by 8.1% in August, while imports from the country declined by 2.5%. As a result, Canada’s merchandise trade surplus with its southern neighbour widened from C$6.1 billion in July to C$11.2 billion.
Statistics Canada described the increase as the largest positive monthly change ever recorded in the bilateral trade balance.
The sharp rise in exports came as American businesses accelerated purchases of Canadian products ahead of new tariffs announced by Washington in July and introduced toward the end of August.
Such advance purchases can temporarily increase export volumes, making it difficult to determine whether the improvement will continue in subsequent months.
Energy products were another important contributor to Canada’s export performance. Their value increased by 4.7% to approximately C$19 billion, supported by stronger shipments of crude oil and refined petroleum products.
Exports of refined petroleum products rose particularly sharply, reflecting increased international demand for products such as diesel.
On the import side, motor vehicles and automotive parts recorded the largest decline, falling 8.8% after reaching unusually high levels in July.
The latest figures highlight the close relationship between Canada’s economic performance and developments in U.S. trade policy.
Although the August surplus represents a significant improvement in Canada’s external trade position, economists caution that part of the increase may reflect businesses adjusting the timing of shipments rather than a sustained expansion in demand.
For Canadian exporters, manufacturers and businesses involved in cross-border trade, the coming months will provide a clearer picture of how American tariffs affect sales, supply chains and investment decisions.
The next merchandise trade report, covering September 2026, is scheduled for release on November 4.
That report will offer an early indication of whether Canadian exports maintained their momentum after the new U.S. trade measures took effect.
