Propping up

Key points

• Canadian exports ticked up in September, capping a robust third-quarter performance driven primarily by gold and crude oil.
• September data confirms Section 338 tariffs are starting to weigh on U.S.-bound shipments from targeted sectors.
• Exports to overseas markets maintained strong momentum.

The U.S. midterm results are in. Two things seem clear to us at this stage (or as clear as they can get these days):

1. A change in the party that controls the U.S. Congress is significant (the Democrats have taken control of both the House and Senate), but this alone does not change the trade situation between the U.S. and Canada. The hope is that a Democratic-controlled Congress will spur lower tariffs, but the President can, and almost certainly will, still pursue his own agenda on trade.
2. The results do not change the fact that Canada must, no matter which party is in charge south of the border, execute on its broader economic game plan: accelerate capital projects, export more overseas, knock down remaining internal trade barriers, and increase private sector investment.

Market reaction to the news has been generally positive, with major U.S. stocks up about 2% while oil prices have dipped below US$90 a barrel for the first time since early October.

As for today’s Twenty-Four topic, we’ll take a look at the latest export data from Statistics Canada to get a level set on where things stood on the national trade front in the third quarter.

Exports stood resilient in Q3

National merchandise exports climbed 0.2% from August to September. Imports, on the other hand, pulled back slightly, contributing to a trade surplus that posted its strongest figures since the pandemic-related rebound in 2022.

Looking at the broader picture, merchandise exports rose 24% year-over-year (y/y) in Q3 and were up 15% year-to-date (YTD) compared to the first nine months of 2025.

Gold and energy prop up increases

Examining specific commodities, energy exports led the expansion with a notable y/y gain in Q3. This was not surprising given that the West Texas Intermediate (WTI) oil price averaged US$86 per barrel during the third quarter—up 32% from last year. While higher prices buoyed crude oil exports, sharp increases in volumes propped up export values for natural gas and refined petroleum products.

Meanwhile, following a brief mid-summer dip, gold exports rebounded in September. As a result, exports of intermediate metal products surged 51% y/y in Q3.

Together, energy and intermediate metal products accounted for over two-thirds of the total national export gain in the third quarter while gains from other sectors were less pronounced.

Overseas exports trend upward

Non-U.S. exports surged 39% y/y in Q3, driven by strong demand from the United Kingdom, China, and South Korea.

Although U.K. gold purchases moderated slightly in September, quarterly demand remained robust, with metals and non-metallic minerals driving 95% of the total growth in shipments to the country.

Exports to China also gained momentum, bolstered by tariff reductions earlier in the year. A 166% jump in farm, fishing, and intermediate food products propelled total export values to China up 59% in Q3. Meanwhile, Canadian exports to South Korea reached a record high, fueled by strong shipments of coal, copper, and crude oil.

What’s next?

September marked the first full month under the new Section 338 tariffs. President Trump recently modified the targeted list of goods, while growing strain on businesses has prompted legal action by U.S. importers. Regardless of upcoming developments—especially with Democrats now controlling both the House and Senate—we expect continued challenges for sectors facing these heavy tariffs.

However, some of these negative impacts may be offset by oil prices, which averaged above US$96 per barrel last month. High prices will continue to support export values to the U.S. as well as overseas markets until further capacity expansions are completed next year. Additionally, gold prices are trending upward, which could boost sales to both U.S. and European markets.

Canada's efforts to diversify global trade partnerships show promise in buffering against U.S. protectionism. However, because the Canadian manufacturing sector remains heavily reliant on the U.S. market, achieving a sustained recovery will require renewed stability and a fair, long-term trade agreement with the United States.

Answer to the previous trivia question: The Canadian Investor Protection Fund provides insurance for stocks traded in the Canadian stock market.

Today’s trivia question: What is the rule of 72?

Turning to another source, the Bank of Canada’s Canadian Survey of Consumer Expectations (done in January, prior to the Iran war) also points to weak sentiment, which the Bank attributes to high prices and trade uncertainty.

There are multiple ways to address the financial strain faced by households with stronger economic growth—and the jobs and income that go along with it—playing a critical role.

In the short-term, U.S. tariffs, higher prices due to the war in the Middle East and the uncertainty related to both are significant headwinds holding back economic growth and there is little we can do about this on our own (other than doing the best we can negotiating with the U.S. on trade). Circling back to the Consumer Price Index numbers we get next week, inflation in March is going to be higher due to spiking gasoline prices with other costs rising the longer the conflict lasts and higher energy and fertilizer costs flow through to other goods and services.

On the bright side, U.S. tariffs are lower than originally threatened and the Alberta labour market has improved over the last year.

There is also much we can do in terms of improving Canada’s productivity via reducing internal economic barriers, diversifying our international trade and successfully executing major projects. As the survey results highlight, this is not just about generating more GDP, but improving the financial situation of real people.

*The latest data were compiled by Ipsos on behalf of MNP LTD between March 10 and March 11, 2026. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed.

Answer to the previous trivia question: The International Monetary Fund was created at the 1944 Bretton Woods Conference and came into formal existence in 1945. Bretton Woods is a village in New Hampshire.

Today’s trivia question: What famous proponent of existentialism died on this day in 1980?