Canada’s trade surplus reached a four-year peak in May, extending its growth streak for the fourth consecutive month, with exports to the United States hitting their highest levels since February of the previous year, according to data released on Tuesday. Statistics Canada reported that Canada recorded a trade surplus of $4.24 billion in May, marking a 0.9% increase from the revised $3.41 billion surplus in the previous month. This marks the third straight month of trade surplus for Canada, driven by a 1.5% surge in exports to the U.S., its primary trading partner. Analysts surveyed by Reuters had forecasted a trade surplus of $2.85 billion.
While U.S. President Donald Trump’s tariffs have impacted key sectors in Canada, businesses are striving to diversify away from the U.S., which historically accounted for nearly three-quarters of Canada’s total exports. Trade experts emphasize the importance of diversification but acknowledge that unraveling longstanding supply chains from the U.S. market will take time.
On the other hand, exports to the U.S. climbed by 1.5% to $53.72 billion in May, marking the fourth consecutive monthly increase and pushing the share of exports to the U.S. to nearly 70%. Conversely, imports from the U.S. decreased by 1.4%. Consequently, Canada’s trade surplus with the United States expanded to $11.6 billion in May from $10.3 billion in April, reaching its highest level since January 2025, potentially driven by increased energy export prices.
Exports to countries outside the U.S. continued to decline in May, albeit at a slower rate compared to April, while imports from non-U.S. nations rose, widening Canada’s trade deficit with non-U.S. countries to $7.4 billion in May.
The rise in exports in May was mainly fueled by increased shipments of metal ores and non-metallic minerals, which surged by 16.1%. This growth was largely attributed to heightened sulfur exports as shipments via the Strait of Hormuz were affected by the Middle East conflict. The conflict disrupted crude oil and fertilizer shipments, leading to increased demand and prices for these products from other sources. However, shipments have been gradually recovering following a ceasefire in mid-June. Additionally, other product categories that saw significant gains in May include consumer goods, industrial chemicals, and farm and fishing food products.
Although energy exports have been a significant contributor to Canada’s trade balance, there was a decline in crude oil and gold exports in May. Energy exports fell by 2% due to reduced 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 imports in May. Despite the drop in energy exports, senior economist Robert Kavcic from BMO noted that the value of energy exports continues to bolster Canada’s trade figures. Kavcic emphasized that trade surpluses in Canada can fluctuate rapidly with changes in oil prices, cautioning that the current trade surplus levels may represent a peak for now. Nonetheless, he believes that net exports are poised to contribute positively to growth in the second quarter, indicating a rebound in the Canadian economy after a sluggish period.
