Canada’s trade surplus highest since 2022 as war fuels exports

By Erik Hertzberg

(Bloomberg) — Canada’s trade surplus widened to its largest in four years as the country’s energy, metals and mineral sectors helped fill global supply gaps left by disruptions in the Strait of Hormuz.

The country’s trade surplus hit $4.2 billion up from $3.4 billion in April, Statistics Canada reported on Tuesday. That’s the third consecutive surplus and the largest the country has reported since May 2022, when oil prices were high after Russia’s invasion of Ukraine.

Exports rose 0.9% to a record $77 billion in May and are up 22% in the last four months, the agency said. Shipments of unwrought aluminum and its alloys were the main upside contributor, rising 51% on the month. 

Those aluminum exports were bound for Netherlands, Italy and Greece, suggesting that Canada is not only diversifying its trade flows, but helping to alleviate supply shortages caused by the disruption of maritime traffic in the Middle East.

The data also show the nation’s exporters benefiting from higher commodities prices, also related to the U.S. and Israel’s armed conflict with Iran. The value of Canada’s energy exports in May was up 70% from a year earlier. Potash exports have risen, and shipments of sulfur rose sharply.

“This increase occurred in a context of constrained global supply, as sulfur shipments transiting through the Strait of Hormuz have slowed since the conflict in the Middle East began,” the agency said.

Canada’s trade surplus with the U.S. also reached its highest level since January 2025, when the country’s exporters sought to front-run the tariffs of U.S. President Donald Trump. Some levies remain in place and are affecting Canada’s steel, aluminum, autos and forestry exports to the U.S. 

While the free trade agreement between the U.S., Canada and Mexico wasn’t extended last week, the trade deal still provides major exemptions for most of Canada’s exports to the U.S.

According to Andrew Grantham, an economist with CIBC, that should keep export volumes elevated from a year ago, “alongside ongoing efforts to grow trade with other countries, which today’s data suggest are paying dividends in some sectors.”

Total imports fell 0.2% on the month, driven by falling gold shipments. In volume terms, exports were little changed and imports were up 0.4% compared with April.  

The U.S. trade deficit widened in May on a broad-based increase in imports and a decline in exports. The gap in goods and services trade grew 42.2% from the prior month to $77.6 billion, Commerce Department data showed Tuesday. 

–With assistance from Mario Baker Ramirez and Mark Niquette.

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Last modified: July 7, 2026