OTTAWA, July 7 - Canada’s merchandise trade surplus expanded to C$4.24 billion in May, marking the highest monthly surplus in four years and representing a fourth consecutive monthly increase in the surplus, official data showed. The May figure was up 0.9% from a revised C$3.41 billion in April, according to Statistics Canada.
While the series reflected a broader upward trend, the statistics agency also noted that this was the third consecutive month in which Canada recorded a trade surplus. The monthly improvement was driven primarily by stronger sales to Canada’s largest trading partner, the United States.
Exports to the U.S. increased 1.5% to C$53.72 billion in May, representing a fourth straight monthly gain in exports south of the border and lifting the share of Canadian exports destined for the U.S. to almost 70% for the month. Imports from the United States fell by 1.4%, contributing to a wider bilateral surplus. Canada’s trade surplus with the U.S. expanded to C$11.6 billion in May from C$10.3 billion in April, a level described by the statistics agency as the largest surplus since the record observed in January 2025.
Analysts polled by Reuters had expected a trade surplus of C$2.85 billion for May, making the outturn notably stronger than the consensus estimate.
Movements outside the U.S. were less supportive. Exports to countries other than the United States continued to decline in May, though the pace of shrinkage moderated from April, while imports from non-U.S. countries rose. That combination widened Canada’s trade deficit with non-U.S. partners to C$7.4 billion in May.
At the sectoral level, the monthly increase in overall exports was led by shipments of metal ores and non-metallic minerals, which jumped 16.1% in May. Statistics Canada said this surge was largely driven by sulfur exports, as shipments passing through the Strait of Hormuz slowed since the conflict in the Middle East began. In addition to ores and minerals, broad-based gains were reported across consumer goods, industrial chemicals, and farm and fishing food products.
Energy exports, however, declined by 2% in May. That fall was attributed to lower crude oil volume exports, following a 43.1% rise in those volumes from February through April. On the imports side, total inbound shipments to Canada dropped 0.2% in May, led by an 18.2% decline in imports of metal and non-metallic categories.
Financial market indicators reflected modest moves following the data. The Canadian dollar was trading down 0.06% at 1.4214 to the U.S. dollar, equivalent to 70.35 U.S. cents. Yields on two-year Canadian government bonds were up 0.9 basis points at 2.367%. The statistics release included the exchange-rate reference $1 = 1.4219 Canadian dollars.
Policymakers and business leaders have faced longer-term questions about market diversification after a period in which U.S. tariffs affected some Canadian sectors. The U.S. typically purchases close to three quarters of Canada’s total exports, and while some businesses have been seeking alternative markets, trade analysts have said reworking decades-old supply chains away from the world’s largest market may take time.