Canada’s trade surplus reached a four-year high in May, marking the fourth consecutive month of expansion. Data released on Tuesday showed that exports to the United States reached their highest level since February of the previous year. Statistics Canada reported that Canada’s trade surplus in May was $4.24 billion, up 0.9% from the previous month’s revised figure of $3.41 billion.
This positive trend in trade surplus for Canada, the third month in a row, was primarily driven by a 1.5% increase in exports to the U.S., Canada’s largest trading partner. Analysts surveyed by Reuters had predicted 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 exploring diversification strategies away from the U.S. market, which historically accounted for nearly three-quarters of Canada’s total exports. Experts note that transitioning supply chains away from the U.S. may take time despite the importance of diversification efforts.
Exports to the U.S. rose by 1.5% to $53.72 billion in May, 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, attributed in part to increased energy export prices.
While exports to countries other than the U.S. continued to decline in May, the rate of decrease was slower compared to April. Imports from non-U.S. countries increased, resulting in Canada’s trade deficit with these countries widening to $7.4 billion in May.
The notable increase in exports in May was primarily driven by higher outbound shipments of metal ores and non-metallic minerals, which rose by 16.1%. This boost was largely due to increased sulfur exports as shipments were affected by disruptions in the Middle East conflict. Other sectors such as consumer goods, industrial chemicals, and farm and fishing food products also saw significant gains in May.
However, Canada witnessed a drop in crude oil and gold exports, which had previously contributed to the country’s rising trade surplus. Energy exports decreased by 2% primarily due to lower crude oil volumes exported following a substantial increase from February to April. Total imports declined by 0.2%, with a notable 18.2% drop in metal and non-metallic category imports in May.
Senior economist Robert Kavcic from BMO noted that while energy exports have started to decline, they are still bolstering Canada’s trade figures. Kavcic emphasized that trade surpluses in Canada can fluctuate rapidly with changes in oil prices, and the current period may represent a peak. Despite this, the data suggests that net exports will contribute positively to growth in the second quarter, indicating a rebound in the Canadian economy from a recent slowdown.