Canada's merchandise trade surplus expanded to $4.2 billion in May, marking the largest surplus in four years, as exports reached a record high, according to Statistics Canada. This surplus increased from $3.4 billion in April, which was revised from an initial reading of $2.7 billion.
Total exports rose by 0.9% in May, achieving the fourth consecutive monthly increase and reaching a record $77.1 billion. This growth was primarily driven by a 16.1% rise in exports of metal ores and non-metallic minerals, including a 37% increase in sulphur exports. Additionally, exports of unwrought aluminum and aluminum alloys surged by 50.7%, contributing significantly to the growth in the metal and non-metallic mineral products sector.
Imports edged down by 0.2% in May to $72.9 billion, as lower imports of metal and non-metallic mineral products more than offset other gains. In volume terms, total exports were essentially unchanged, while imports rose by 0.4%.
Regionally, Canada's trade surplus with the United States widened to $11.6 billion, the largest since January 2025, as exports to the U.S. increased by 1.5% and imports fell by 1.4%. Exports to countries other than the United States edged down by 0.3%, while imports from those countries rose by 1.5%.
Economists suggest that while the current surplus is significant, it may be temporary due to potential fluctuations in commodity prices. BMO senior economist Robert Kavcic noted that Canadian trade surpluses can be short-lived, often influenced by swings in oil prices. He indicated that this might be the peak for now but acknowledged that net exports are expected to contribute positively to growth in the second quarter.
Overall, the data indicates a positive trend in Canada's trade balance, with strong export performance offsetting modest declines in imports.