Canada’s trade surplus in May reached a four-year peak, marking the fourth consecutive monthly increase. The surge was driven by a boost in exports to the United States, hitting the highest level since February of the previous year. Statistics Canada reported a trade surplus of $4.24 billion for May, up 0.9% from the revised $3.41 billion posted in the prior month.
This marked the third consecutive month of trade surplus for Canada, primarily fueled by a 1.5% rise in exports to the U.S., its largest trading partner. Analysts had estimated a trade surplus of $2.85 billion. Despite challenges posed by U.S. President Donald Trump’s tariffs on critical 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.
Exports to the U.S. saw a 1.5% increase to $53.72 billion, marking the fourth consecutive monthly rise. This pushed the share of exports to the U.S. to almost 70% in May, while imports from the U.S. dropped 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. This growth could be attributed in part to higher energy export prices.
However, exports to countries other than the U.S. continued to decline in May, albeit at a slower rate than in April, while imports from non-U.S. countries increased. This led to a widening of Canada’s trade deficit with non-U.S. countries to $7.4 billion in May.
The significant contributor to the monthly export increase was outbound shipments of metal ores and non-metallic minerals, which surged by 16.1%. This growth was largely fueled by sulfur exports, as shipments through the Strait of Hormuz slowed due to conflicts in the Middle East. The conflict had disrupted crude oil and fertilizer shipments, driving up demand and prices for these products. However, with a ceasefire reached in mid-June, shipments have been gradually returning to normal.
Despite the overall positive trend, crude oil and gold exports experienced a decline, impacting Canada’s trade balance. Energy exports dropped by 2% due to lower crude oil volumes exported, following a substantial increase from February to April. Total imports decreased by 0.2%, led by an 18.2% drop in metal and non-metallic categories in May.
Senior economist Robert Kavcic from BMO noted that while energy exports have started to decline, their value is still supporting Canada’s trade figures. Kavcic highlighted that trade surpluses in Canada can fluctuate quickly with changes in oil prices, emphasizing that the current situation is likely a peak. Despite these fluctuations, net exports are expected to contribute positively to growth in the second quarter, indicating a recovery in the Canadian economy.
The positive trade surplus figures reflect a resilient Canadian export sector amid evolving global trade dynamics and economic challenges.