National Bank Financial is predicting that the Bank of Canada will hike interest rates on September 8.

Following the release of much better than expected trade figures for June, NBF says that it is revising its GDP growth estimate for the second quarter up to 5% from 4.4%. “ The Canadian economy was running with a full head of steam in Q2,” it declares.

“Recall that just a few weeks back, the Bank of Canada’s monetary policy update assumed a negative contribution from net exports in both 2004 and 2005,” the firm says. “The Bank of Canada also assumed GDP growth of 4% in Q2 with an output gap of -0.3% (which it expected to see closing by the middle of next year). So much for that forecast.”

“With GDP now on track to grow 5% in Q2, excess capacity in the Canadian economy has already vanished – that’s one year ahead of schedule!” NBF raves. “The Bank will be forced to acknowledge this situation at its next interest-rate setting meeting. The table is set for a September rate hike in Canada.” The only thing that could derail a hike, the firm suggests is another dismal U.S. payrolls number (to be released Sept. 3).