Canada’s international merchandise trade deficit narrowed to $5.9 billion in May, down from a record $7.6 billion in April. Total exports rose 1.1 per cent, while imports fell 1.6 per cent.
The rebound in exports was largely driven by a 15.1 per cent increase in metal and non-metallic mineral products, which rose 30.1 per cent to a record $5.9 billion, attributed to higher deliveries to the United Kingdom.
Excluding metal and non-metallic mineral products, total exports declined 1.2 per cent. In volume terms, overall exports were up 0.7 per cent, indicating growth was not limited to price movements.
Exports of consumer goods rose 2.6 per cent, bolstered by pork exports to Japan and a strong rebound in seafood products. Still, total consumer goods exports remained 18.5 per cent below the January peak.
By contrast, exports of energy products declined 5.6 per cent, with crude oil exports falling 4.0 per cent on weaker prices and volumes. Market prices for crude dropped in early April and remained subdued through most of May.
Imports fell for a third consecutive month, down 16.8 per cent. Unwrought gold, silver, and platinum group metal imports dropped 43.2 per cent, following a record spike in April.
Vehicle imports also declined, falling 5.3 per cent. Passenger car and light truck imports dropped 9.7 per cent, reaching their lowest level in over two years. The continued decline follows the introduction of reciprocal tariffs between Canada and the United States.
Offsetting some of the overall decline, imports of consumer goods rose 4.3 per cent, with notable increases in pharmaceutical products and miscellaneous goods, including video game consoles.
Exports to the United States fell 0.9 per cent in May, while imports from the U.S. decreased 1.2 per cent. Canada’s merchandise trade surplus with the United States edged up slightly to $3.2 billion from $3.1 billion in April.
The share of Canadian exports destined for the U.S. fell to 68.3 per cent, down from a 2024 average of 75.9 per cent.
Exports to other countries rose 5.7 per cent to a record high due to higher shipments to the United Kingdom (gold), Singapore (crude oil), and Italy (aluminum and pharmaceuticals). Canola and crude oil exports to China declined.
Imports from non-U.S. countries fell 2.0 per cent, bringing total trade with those partners to a record $47.6 billion. Canada’s trade deficit with non-U.S. countries narrowed from $10.7 billion in April to $9.1 billion in May.
Service exports edged down 0.2 per cent to $17.9 billion, while service imports rose 1.8 per cent to $18.6 billion.
Combined, goods and services exports rose 0.8 per cent to $78.7 billion in May. Total imports declined 0.8 per cent to $85.3 billion, reducing Canada’s overall trade deficit to $6.6 billion from $8.0 billion the previous month.
The coming months will test the resilience of Canada’s export sector and the stability of its trade relationships amid a shifting global landscape.