Canada International Trade (May 2026)

Surge in trade surplus entirely down to price effects

The further improvement in Canada’s goods trade balance to a four-year high was not as good as it looks, as total export volumes were essentially unchanged. The only positive, therefore, is that the rise in import volumes suggests that domestic demand is gradually improving.

The widening of the goods trade balance to $4.2bn in May, from an upwardly revised $3.4bn in April, was higher than consensus expectations of $2.9bn but closer to our own forecast of $4.6bn. The 0.9% m/m rise in exports was led by a 16.1% m/m rise in metal ores and non-metallic minerals. That said, exports of consumer goods (+3.9%), basic and industrial chemical, plastic and rubber products (+5.6%) and farm, fishing and intermediate food products (+2.4%) all also rose. However, this was all down to price effects – in volume terms, exports were unchanged. Meanwhile, despite the further rise in oil prices in May, energy exports fell by 2%, reflecting a sizeable fall in volumes.

On the flip side, imports nudged down by 0.2% m/m, which was almost entirely due to a 18.2% m/m decline in imports of non-metallic mineral products. This was also down to price effects: in real terms, imports rose by 0.4% m/m. This means that net trade actually weakened slightly in May and, therefore, the data appear consistent with the flash estimate of a modest 0.1% m/m rise in GDP that month.