Canada posted a trade surplus for the third consecutive month in May, driven primarily by higher sulphur shipments.

Data published by Statistics Canada on Tuesday showed total exports rose by 0.9 per cent to reach a record $77.1 billion in May, widening Canada’s trade surplus to $4.2 billion.

It is the largest trade surplus since May 2022 and follows surpluses of $3.4 billion in April 2026 and $1.8 billion in March.

May’s increase was primarily driven by a 16.1 per cent increase in exports of metal ores and non-metallic mineral products.

Gains were broad-based in this category, with the sharpest spike observed in sulphur exports (37 per cent) due to boosted fertilizer prices as the closure of the Strait of Hormuz slowed global sulphur shipments. Exports of gold ore also more than doubled in May due to increased shipments to China.

Exports of metal and non-metallic mineral products were also up by 1.5 per cent in May, driven by a 50.7 per cent increase in aluminum exports , particularly to the Netherlands, Greece and Italy.

Those gains were partially offset by a two per cent decrease in energy product exports.

Crude exports declined by 5.4 per cent in May after surging 43.1 per cent from February to April.

By volume, total exports were unchanged following a three per cent increase in April.

Economists were cautious about the strong monthly surplus, noting that many of the gains seen over the past three months came as a result of higher prices for volatile commodities such as gold and oil.

“The recent decline in global oil prices will likely see the trade surplus slim ahead, even if export volumes are maintained,” wrote Andrew Grantham, a senior economist at CIBC Capital Markets, in a note on Tuesday morning. “May’s surplus could be as good as it gets for Canada’s merchandise trade balance this year.”

Elevated uncertainty surrounding United States tariffs and the Canada-U.S.-Mexico Agreement (CUSMA) may also affect Canada’s trade balance going forward, said Marc Ercolao, an economist with TD Bank Economics.

U.S. President Donald Trump’s administration announced on Canada Day that it was declining to renew the CUSMA deal, kickstarting a decade of annual reviews.

“This leaves risks modestly tilted to the downside even as solid U.S. demand offers a partial offset,” Ercolao wrote in a note on Tuesday.

But Derek Holt, vice-president and head of capital markets economics at Scotiabank, argued that trade uncertainty is an “overstated shock” to the Canadian economy.

Canada’s export volumes have been increasing since the third quarter of 2025 because the majority of Canadian exports to the U.S. are CUSMA compliant and thus tariff exempt. Canadian exports are also more competitive in U.S. markets because of the strong dollar and weaker loonie, and because effective U.S. tariffs have been lower than applied against other trade partners.

“All of this is a big part of why I’m still of the belief that a) trade uncertainty is an overstated shock to the Canadian economy, and b) the misguided U.S. trade wars are likely to divert global trade around the U.S. as new partnerships are secured,” Holt said.

Total imports edged down by 0.2 per cent in May after reaching a record high in April, mainly due to lower imports of metal and non-metallic mineral products, especially gold. Excluding this category, imports rose by 1.9 per cent in May. In volume terms, total imports were up 0.4 per cent.

Canada’s trade surplus with the U.S. widened from $10.3 billion in April to $11.6 billion in May, the largest surplus since January 2025.

However, exports to non-U.S. markets fell for a second consecutive month, edging down 0.3 per cent in May after a four per cent decrease in April. Lower exports of gold to the United Kingdom contributed significantly to the decline.

Imports from non-U.S. markets rose by 1.5 per cent in May, due to increased shipments of passenger cars and light trucks from South Korea and “various products” from China, Statistics Canada said.

“Foreign direct investment into Canada has long been surging, including from the U.S., but led by the rest of the world. Foreigners are more bulled up on Canada than Canadian businesses that are yet again underinvesting,” Holt said.

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