Statistics Canada released the trade data on Wednesday. Canada's trade deficit narrowed to C$1.73 billion in September from a deficit of C$2.66 billion in August. August's figure was revised down from a deficit of C$2.53 billion.
Analysts had expected a trade deficit of C$1.9 billion.
The decrease in deficit was driven by a drop in imports. Imports fell 1.2% in September.
Imports of basic and industrial chemical, plastic and rubber products declined by 5.2% in September, and imports of metal and non-metallic mineral products dropped 14.3%, while imports of energy products slid 12.3%.
Exports increased 0.7% in September.
Exports of energy products rose by 3.7% in September, exports of consumer goods jumped by 4.3%, exports of motor vehicles and parts dropped by 3.7%, while exports of metal and non-metallic mineral product were up 3.2%.