Canada’s trade surplus hit a four-year peak in May, marking the fourth straight month of growth. Data revealed that exports to the United States surged to their highest level since February of the previous year. Statistics Canada reported that Canada achieved a trade surplus of $4.24 billion in May, up by 0.9% from the revised figure of $3.41 billion in the prior month.
This positive trend marked the third consecutive month of trade surplus for Canada, driven by a 1.5% increase in exports to the U.S., its primary trading partner. Analysts surveyed by Reuters had predicted a trade surplus of $2.85 billion, highlighting the better-than-expected performance.
Despite challenges posed by U.S. tariffs on certain Canadian sectors, businesses have been striving to reduce dependence on the U.S. market. However, experts caution that unraveling long-standing supply chains from the U.S. could be a gradual process.
In May, exports to the U.S. continued to rise, climbing by 1.5% to $53.72 billion, marking the fourth consecutive monthly increase. Conversely, imports from the U.S. decreased by 1.4%. Consequently, Canada’s trade surplus with the U.S. expanded to $11.6 billion in May from $10.3 billion in April, reaching its highest level since January 2025, partly due to increased energy export prices.
Exports to countries other than the U.S. experienced a slight decline in May compared to April, while imports from non-U.S. nations rose, leading to a widened trade deficit of $7.4 billion for Canada with these countries.
The growth in exports in May was primarily driven by increased shipments of metal ores and non-metallic minerals, which surged by 16.1%. Notably, sulfur exports saw a boost as shipments via the Strait of Hormuz were impacted by conflicts in the Middle East. The region’s turmoil had disrupted crude oil and fertilizer exports, resulting in heightened demand and prices for these products globally.
Despite these fluctuations, Canada’s energy exports, particularly crude oil and gold, experienced a decline in May, offsetting some of the gains in trade. Total imports also decreased marginally by 0.2%, with a significant drop of 18.2% in metal and non-metallic imports.
Economists, such as BMO’s Robert Kavcic, noted that while energy exports have tapered off, they continue to bolster Canada’s trade performance. Kavcic emphasized the impact of oil price fluctuations on trade surpluses, indicating that the current high point may not be sustained for long. Nonetheless, the positive trade balance is expected to contribute positively to Canada’s economic growth in the second quarter, reflecting an encouraging rebound for the Canadian economy.
