Canada’s trade surplus expanded to a four-year peak in May, marking the fourth consecutive monthly increase, with exports to the United States reaching their highest level since February last year, according to data released on Tuesday. Statistics Canada reported that Canada recorded a trade surplus of $4.24 billion in May, up by 0.9% from a revised $3.41 billion in the previous month. This marked the third straight month of trade surplus for Canada, primarily driven by a 1.5% surge in exports to the U.S., its primary trading partner. Analysts surveyed by Reuters had anticipated a trade surplus of $2.85 billion.
Amidst challenges posed by U.S. President Donald Trump’s tariffs on key sectors in Canada, businesses have been exploring diversification away from the U.S., which traditionally accounted for nearly three-quarters of Canada’s total exports. Nevertheless, experts caution that while diversification is crucial, untangling decades-old supply chains from the largest market globally could be a time-consuming process.
Exports to the U.S. climbed by 1.5% to $53.72 billion, marking the fourth consecutive monthly rise, pushing the share of exports to the U.S. to nearly 70% in May. Conversely, imports from the U.S. decreased by 1.4%. Consequently, Canada’s trade surplus with the U.S. widened to $11.6 billion in May from $10.3 billion in April, reaching its largest surplus since the record high observed in January 2025, attributed partly to increased energy export prices, as per Statistics Canada.
Exports to nations other than the U.S. continued to contract in May, albeit at a slower pace compared to April, while imports from non-U.S. countries rose. This led to a widening of Canada’s trade deficit with non-U.S. countries to $7.4 billion in May.
The main driver of the monthly export growth was the rise in outbound shipments of metal ores and non-metallic minerals by 16.1%, with sulfur exports playing a significant role as shipments through the Strait of Hormuz slowed due to tensions in the Middle East. The conflict in the region disrupted crude oil and fertilizer shipments, boosting demand and prices for these products from alternative sources. However, exports of crude oil and gold, which had been contributing to Canada’s growing trade surplus, declined.
Energy exports were down by 2% due to reduced crude oil volume exports following a significant increase of 43.1% from February to April. Total imports decreased by 0.2%, led by an 18.2% decline in metal and non-metallic categories’ imports in May. Senior economist Robert Kavcic from BMO noted that although energy exports have started to decline, the value of energy exports continues to support Canada’s trade performance. He highlighted that Canadian trade surpluses can be volatile, especially with fluctuations in oil prices, and emphasized that the current figures indicate a positive contribution to growth in the second quarter, suggesting a recovery for the Canadian economy after a period of sluggish performance.
