Canada's Trade Balance Swing Back to A Surplus in September, Says RBC

12:07 PM EST, 12/11/2025 (MT Newswires) -- Details behind Thursday's surprisingly large swing in the Canadian trade balance back to surplus in September were consistent with earlier reports flagging a stabilization in the broader economic backdrop following significant trade disruptions that began in the spring, said RBC.

United States tariffs continue to weigh on activity in targeted sectors, but most products continued to cross the border duty-free in September (86%.) Exports to other parts of the world ramped up (+11% from August and +18.6% from a year ago).

There were some signs of stabilization among some specifically tariff-targeted sectors; aluminum exports rose sharply for a second straight month and copper exports edged up after falling sharply in August, noted the bank.

The increase in goods exports in Q3 as a whole came in stronger than the placeholder Statistics Canada used to calculate the contribution to net trade in last week's Q3 gross domestic product report, suggesting early upside risk to the estimated 3.1 percentage points add to GDP growth from net trade -- September data on exports to the U.S. was unavailable for that earlier report because of delays tied to the U.S. shutdown, added RBC.

That Q3 GDP increase of a 2.6% annualized rate was entirely explained by an increase in net trade with domestic demand growth flat. But the bank's tracking of consumer demand has remained relatively resilient to date in Q4 and labor markets have shown further signs of improvement, with the unemployment rate ticking sharply lower in November.

Uncertainty about Canada's future trade relationship with the U.S. remains, slower population growth will weigh on aggregate output and weak productivity growth persists as a structural challenge, according to RBC. However, absent another external shock, the bank remains cautiously optimistic about the Canadian economic outlook in the year ahead and it doesn't expect the BoC will need to lower interest rates further.

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