Canada’s trade surplus reached a four-year peak in May, marking the fourth consecutive monthly increase. The surge was driven by a rise in exports to the United States, hitting the highest level since February the previous year, according to data released on Tuesday.
Statistics Canada reported that Canada recorded a trade surplus of $4.24 billion in May, up 0.9% from a revised $3.41 billion in the previous month. This marked the third straight month of surplus for Canada, mainly fueled by a 1.5% increase in exports to the U.S., its primary trading partner. Analysts surveyed by Reuters had anticipated a trade surplus of $2.85 billion.
Despite challenges from U.S. President Donald Trump’s tariffs impacting key sectors in Canada, businesses have been striving to diversify away from the U.S., which traditionally accounted for nearly three-quarters of Canada’s total exports. Experts note that while diversification is crucial, unraveling long-established supply chains from the largest market globally may require time.
U.S. exports surged by 1.5% to $53.72 billion in May, marking the fourth consecutive monthly rise, with the share of exports to the U.S. reaching almost 70%. Conversely, imports from the U.S. dropped by 1.4%. This led to Canada’s trade surplus with the U.S. expanding to $11.6 billion in May from $10.3 billion in April, marking the largest surplus since January 2025, as per Statistics Canada. The increase could be attributed in part to higher energy export prices.
Exports to countries other than the U.S. continued to decline in May, albeit at a slower rate compared to April, while imports from non-U.S. nations rose. This widened Canada’s trade deficit with non-U.S. countries to $7.4 billion in May.
The notable rise in exports for the month was primarily driven by increased shipments of metal ores and non-metallic minerals, which surged by 16.1%. This growth was largely fueled by sulfur exports, which were affected by slowed shipments passing through the Strait of Hormuz due to Middle East conflicts. However, with a ceasefire reached in mid-June, shipments have gradually resumed.
Other product categories also saw significant gains in May, with widespread increases observed in consumer goods, industrial chemicals, and agricultural and fishing food products, according to data from the agency.
Despite these positive trends, crude oil and gold exports, which had previously bolstered Canada’s trade balance, experienced declines in May. Energy exports dropped by 2%, primarily due to lower crude oil volume exports following a substantial increase from February to April. Total imports also decreased by 0.2%, with a notable 18.2% decline in metal and non-metallic categories in May.
Senior economist Robert Kavcic from BMO noted that while the value of energy exports continues to support Canada’s trade figures, the decline in energy exports signifies a shift. Kavcic mentioned in a note to investors that Canadian trade surpluses can fluctuate rapidly with oil price changes and highlighted that the current figures may represent a peak. Nonetheless, he indicated that net exports are poised to contribute positively to growth in the second quarter, signaling an improved outlook for the Canadian economy.