Canada's merchandise-trade surplus widened to C$4.24 billion in May, its largest in four years, as exports hit a record high on rising metals, minerals and oil shipments. Economists say net exports should support second-quarter growth, though the reading may mark a near-term peak.
Canada posted a May merchandise-trade surplus of 4.24 billion Canadian dollars, about US$2.99 billion — the widest since May 2022, Statistics Canada said Tuesday. It marks a third straight monthly surplus as exports rebound from a weak start to the year.
Record exports drive the surplus
The May figure beat the C$2.68 billion economists had expected and followed April's upwardly revised C$3.41 billion surplus. Exports climbed 0.9% to a record high, lifted by more goods heading to the U.S., while imports slipped 0.2% between April and May.
The surplus with the U.S. expanded to C$11.63 billion, the largest since January 2025, even as the deficit with other countries widened modestly. Higher prices for oil and other commodities as the Middle East conflict dragged on helped drive the value of shipments. Metal ores and nonmetallic minerals led the gains, with sulfur exports rising sharply as the war and the squeeze on the Strait of Hormuz constricted global supplies.
Economists see support for Q2 growth
Energy exports slipped 2% for the month but were up a little more than 70% year over year on the jump in oil prices tied to the Iran war. Robert Kavcic, senior economist at Bank of Montreal Capital Markets, called the reading likely the high-water mark for now, adding that net exports look set to add firmly to second-quarter growth.
A flash estimate from Statistics Canada suggests GDP ticked up 0.1% in May, putting the economy on track for annualized growth above 2% in the second quarter. With oil prices having fallen in recent weeks, economists say the trade surplus may have peaked. Uncertainty also rose after the U.S. declined to extend the USMCA pact in its current form last week, though the deal remains in effect with most exports still exempt from U.S. tariffs.
Source: MarketScreener
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