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Canadian exports rose for the third consecutive month in July, narrowing the country’s trade deficit with the world and increasing its trade surplus with the United States.

Statistics Canada reported on Thursday that exports rose 0.9 per cent, while imports fell by 0.7 per cent, reducing Canada’s trade deficit to $4.9-billion from $6-billion.

Exports have been modestly rising over the last three months after taking a major hit in April as tariffs came into effect. As a result, economists expect net trade to boost economic growth in the third quarter, despite the ongoing impact of U.S. tariffs on strategic sectors.

“Canadian exports and the goods trade deficit began to stabilize in July, albeit at weaker levels than prevailed before U.S. tariffs and related uncertainty took hold,” wrote CIBC senior economist Andrew Grantham in a client note.

After falling by 11.2 per cent in April, exports have increased by 3 per cent since then, leaving export levels still significantly lower than before the trade war.

Energy exports rose by 4.2 per cent in July, following five consecutive monthly declines. Exports of motor vehicles and parts also saw a sizeable bump, rising 6.6 per cent.

The increase in overall exports was partially offset by a decline in unwrought gold exports, which fell by 12.2 per cent.

Meanwhile, Statscan said a decline in machinery imports was the largest contributor to the overall decrease in imports in July.

Imports from the United States also fell, exports rose, widening Canada’s trade surplus with the U.S. to $6.7-billion in July from $3.7-billion in June. This marks the largest trade surplus with the U.S. since March.

Most Canadian goods continue to cross the U.S. border tariff-free, due to a tariff exemption on products that are compliant with the United-States-Mexico-Canada agreement. However, the steel and aluminum sectors continue to face 50 per cent tariffs.

The automotive sector also faces 25-per-cent tariffs on the non-U.S. content in USMCA-compliant vehicles, while vehicles that do not meet the rules of origin under the trade deal face an outright 25-per-cent tariff.

Prime Minister Mark Carney said on Thursday that he’s expecting to reach agreements with the U.S. on some strategic sectors affected by tariffs, though he tempered expectations on when that might happen.

Mr. Carney dropped many of Canada’s retaliatory tariffs against the U.S. recently in hopes of furthering trade talks with U.S. President Donald Trump.

 The Descartes Systems Group Inc. (DSGX) on Wednesday reported fiscal second-quarter profit of $38 million.

On a per-share basis, the Waterloo, Ontario-based company said it had net income of 43 cents.

The results did not meet Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 49 cents per share.

The logistics provider posted revenue of $179.8 million in the period, topping Street forecasts. Three analysts surveyed by Zacks expected $177.2 million.

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This story was generated by Automated Insights 

http://automatedinsights.com/ap

Quarterly Highlights

• Net earnings attributable to shareholders of the Corporation were $782.5 million for the first quarter of fiscal 2026 compared with $790.8 million for the first quarter of fiscal 2025. Adjusted net earnings attributable to shareholders of the Corporation¹ were approximately $737.0 million compared with $790.0 million for the corresponding quarter of last year, representing a decrease of 6.7%.
  
• Net earnings attributable to shareholders of the Corporation were $0.82 per diluted share for the first quarter of fiscal 2026 compared with $0.83 per diluted share for the first quarter of fiscal 2025. Adjusted diluted net earnings per share¹ were $0.78, representing a decrease of 6.0% from $0.83 for the corresponding quarter of last year.
  
• Total merchandise and service revenues of $4.7 billion, an increase of 4.5%. Same-store merchandise revenues² increased by 0.4% in the United States, by 3.8% in Europe and other regions¹, and by 4.1% in Canada.
  
• Merchandise and service gross margin¹ increased by 0.9% in the United States to 34.6%, while it decreased by 0.9% in Europe and other regions to 38.9%, and by 0.9% in Canada to 33.9%.
  
• Same-store road transportation fuel volumes decreased by 0.9% in the United States, and by 1.3% in Europe and other regions, while it increased by 2.2% in Canada.
  
• Road transportation fuel gross margin¹ of 44.00¢ per gallon in the United States, a decrease of 4.13¢ per gallon, US 11.41¢ per liter in Europe and other regions, an increase of US 2.73¢ per liter, and CA 14.21¢ per liter in Canada, an increase of CA 1.10¢ per liter.

https://www.newswire.ca/news-releases/alimentation-couche-tard-announces-its-results-for-its-first-quarter-of-fiscal-year-2026-851340241.html

Monday September 1

Canadian and U.S. markets closed (Labour Day)

China manufacturing, non-manufacturing and composite PMI

Japan capital spending and manufacturing PMI

Euro zone jobless rate and manufacturing PMI

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Tuesday September 2

Euro zone CPI

(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for August.

(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for August.

(10 a.m. ET) U.S. ISM Manufacturing PMI for August.

(10 a.m. ET) U.S. construction spending for July. The Street is projecting a month-over-month decline of 0.2 per cent.

Also: U.S. and Canadian vehicle sales for August.

Earnings include: Alimentation Couche-Tard Inc.; Zscaler Inc.

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Wednesday September 3

Japan and Euro zone services and composite PMI

(8:30 a.m. ET) Canadian labour productivity for Q2.

(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for July.

(10 a.m. ET) U.S. factory orders for July. Consensus is a month-over-month decline of 1.4 per cent.

(2 p.m. ET) U.S. Beige Book is released.

Earnings include: Descartes Systems Group Inc.; Hewlett Packard Enterprise Co.; Northwest Co. Inc.; Salesforce Inc.

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Thursday September 4

Euro zone retail sales

(8:15 a.m. ET) U.S. ADP National Employment for August.

(8:30 a.m. ET) Canada’s merchandise trade balance for July.

(8:30 a.m. ET) U.S. initial jobless claims for week of August 30. Estimate is 233,000, up 4,000 from the previous week.

(8:30 a.m. ET) U.S. productivity for Q2. The Street is estimating an annualized rate rise of 2.9 per cent.

(8:30 a.m. ET) U.S. goods and services trade deficit for July.

(9:30 a.m. ET) Canada’s S&P Global Services PMI for August.

(9:45 a.m. ET) U.S. S&P Global Services/Composite PMI for August.

(10 a.m. ET) U.S. ISM Services PMI for August.

Earnings include: Broadcom Inc.; Enghouse Systems Group Ltd.; Lululemon Athletica Inc.; Transcontinental Inc.

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Friday September 5

Japan real cash earnings and household spending.

Germany factory orders

Euro zone real GDP

(8:30 a.m. ET) Canadian employment for August. The Street is expecting a relatively flat reading (a gain of 10,000 jobs) with the unemployment rate rising 0.1 per cent to 7.0 per cent and average hourly wages rising 3.2 per cent year-over-year.

(8:30 a.m. ET) U.S. nonfarm payrolls for August. Consensus is a rise of 75,000 jobs month-over-month with the unemployment rate rising 0.1 per cent to 4.3 per cent and average hourly earnings up 0.3 per cent (or 3.7 per cent year-over-year).

(10 a.m. ET) U.S. Global Supply Chain Pressure Index for August.

• The personal consumption expenditures price index showed that core inflation ran at a 2.9% seasonally adjusted annual rate in July, meeting estimates but higher than June.
• Consumer spending increased 0.5% on the month, in line with forecasts and indicative of strength despite the higher prices. Personal income accelerated 0.4%.

https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html

Canada’s economy contracted in the second quarter by a much larger degree than anticipated on an annualized basis as U.S. tariffs squeezed exports, but higher household and government spending cushioned some of the impact, data showed on Friday.

The GDP for the quarter that ended June 30 decelerated by 1.6 per cent on an annualized basis from a downwardly revised growth of 2.0 per cent posted in the first quarter, Statistics Canada said, taking the total annualized growth in the first six months of the year to 0.4 per cent.

This was the first quarterly contraction in seven quarters.

How today’s surprisingly weak GDP report has shifted market and economist views for future BoC rate cuts

Canada’s annual job growth barely above zero in June, payroll survey shows

U.S. trade tensions drag down already weak business creation in Canada

A larger-than-expected deceleration in growth could boost chances of rate cut by the Bank of Canada in September. The central bank has kept rates steady at 2.75 per cent at its last three meetings.

Money markets increased their bets of a rate cut on September 17 to 48 per cent after the GDP data was released from 40 per cent before.

Statscan said the economy contracted by 0.1 per cent in June, mainly led by a decline in output from goods-producing industries, which accounts for a quarter of the country’s GDP.

The quarterly GDP is calculated based on income and expenditure while the monthly GDP is derived from industrial output.

This is the third month in a row that the GDP, based on industry output declined and was the first time in three years that the economy contracted for three consecutive months.

Analysts polled by Reuters had forecast second quarter GDP to contract by 0.6 per cent and the June monthly GDP to expand by 0.1 per cent.

An advance estimate for July showed the economy could likely grow by 0.1 per cent on a month-on-month basis, signalling that the third quarter might not be as bad as the previous one.

The Canadian dollar traded down 0.17 per cent to 1.3771 to the U.S. dollar, or 72.62 U.S. cents. Yields on the two-year government bonds dropped further after the data fell by 2.8 basis points to 2.664 per cent.

Exports, mainly responsible for sinking the economy in the second quarter, declined 7.5 per cent in the second quarter, the statistics agency said, adding this was the biggest drop in five years.

Business investment in machinery and equipment also contracted for the first time since the pandemic, with investments falling 0.6 per cent in Q2.

However, some silver lining in the second quarter came from a 3.5 per cent growth in the final domestic demand, an indicator of the health of the domestic economy.

This was mainly boosted by household final consumption expenditure which jumped by 4.5 per cent on an annualized basis, residential investments which rose 6.3 per cent and government final consumption expenditure which surged by 5.1 per cent, Statscan noted.

Monday August 25

U.K. markets closed

Germany business climate

(10 a.m. ET) U.S. new home sales for July. The Street expects an annualized rate rise of 1.3 per cent.

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Tuesday August 26

(8:30 a.m. ET) Canada’s manufacturing sales for July.

(8:30 a.m. ET) Canadian wholesale trade for July.

(8:30 a.m. ET) U.S. durable orders for July. Consensus is a month-over-month decline of 4.0 per cent with core orders rise of 0.3 per cent.

(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for June. Consensus is a decline of 0.1 per cent from May but up 1.9 per cent year-over-year.

(9 a.m. ET) U.S. FHFA House Price Index for June. The Street expects a flat reading month-over-month and a gain of 2.7 per cent year-over-year.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for August.

(2:30 a.m. ET) Bank of Canada governor Tiff Macklem speaks at the Bank of Mexico’s 100th anniversary seminar.

Earnings include: Bank of Montreal and Bank of Nova Scotia

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Wednesday August 27

China industrial profits

Germany consumer confidence

Earnings include: CrowdStrike Holdings Inc.; Dollarama Inc.; EQB Inc.; National Bank of Canada; Nvidia Corp.; Royal Bank of Canada

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Thursday August 28

Euro zone economic and consumer confidence

(8:30 a.m. ET) Canada’s current account balance for Q2.

(8:30 a.m. ET) Canada’s payroll survey: job vacancy rate for June.

(8:30 a.m. ET) U.S. initial jobless claims for week of Aug. 23. Estimate is 229,000, a decline of 6,000 from the previous week.

(8:30 a.m. ET) U.S. real GDP and GDP price index for Q2. Consensus projections are annualized rate increases of 3.1 per cent and 2.0 per cent, respectively.

(10 a.m. ET) U.S. pending home sales for July.

Earnings include: Alibaba ADR; Canadian Imperial Bank of Commerce; Dell Technologies Inc.; Lululemon Athletica Inc.; Toronto-Dominion Bank

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Friday August 29

Japan jobless rate, industrial production, retail sales and consumer confidence

Germany’s retail sales, CPI and unemployment

ECB’s three-year CPI expectations

(8:30 a.m. ET) Canada’s real GDP for Q2. The Street expects an annualized rate decline of 0.5 per cent with monthly real GDP rising 0.2 per cent from May.

(8:30 a.m. ET) U.S. personal spending and personal income for July. The consensus forecasts are month-over-month gains of 0.5 per cent and 0.4 per cent, respectively.

(8:30 a.m. ET) U.S. core PCE price index for July. Consensus is a gain of 0.3 per cent from June and up 2.9 per cent year-over-year.

(8:30 a.m. ET) U.S. goods trade deficit for July.

(8:30 a.m. ET) U.S. wholesale and retail inventories for July.

(9:45 a.m. ET) U.S. Chicago PMI for August.

(10 a.m. ET) U.S. University of Michigan Consumer Sentiment for August.

Also: Ottawa’s budget balance for June.

Earnings include: BRP Inc.; Laurentian Bank of Canada

Canadian oil and gas producer Cenovus Energy CVE-T +4.35%increase said on Friday it will buy MEG Energy 

N/A in a cash-and-stock deal valued at $7.9-billion, including debt, to create one of the largest oil sands companies in Canada.

The two companies, which will combine MEG’s Christina Lake oil sands operations in Alberta with Cenovus’ neighboring assets, will have a combined oil sands production of over 720,000 barrels per day.

MEG Energy in June rejected a hostile takeover offer from Strathcona Resources, calling the bid inadequate and not in the best interest of its shareholders, and launched a strategic review to explore better alternatives.

James McFarland, chairman of MEG Energy, said on Friday its board and a special committee have “concluded that the proposed transaction with Cenovus represents the best strategic alternative” after considering Strathcona’s unsolicited offer and engaging with multiple parties.

Strathcona Resources did not immediately respond to a Reuters request for comment on whether it was considering an enhanced bid or other options in response to Cenovus’ offer.

Cenovus’ offer of $27.25 per share gives MEG an equity value of about $6.93-billion, according to Reuters calculations. It represents a 27.9-per-cent premium to MEG’s last close before Strathcona launched an unsolicited bid in May.

Under the deal, MEG shareholders will receive 75 per cent of the consideration in cash and 25 per cent in Cenovus shares.

The deal, approved by MEG’s board, is expected to close early in the fourth quarter of 2025.