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Canada’s economy was in a trade surplus for the third straight month in May and exports were up for the fourth month, Statistics Canada reported Tuesday.
This three-month stretch was during the same period when the Iran war sent shockwaves through global supply chains for key materials and resources, which seems to have benefited Canada’s export economy.
Exports in May were up overall by 0.9 per cent to a record $77.1 billion, which marked the fourth straight monthly increase. Part of this spike in export values was attributed to higher prices for resources like oil amid the Iran war.
“With the latest merchandise trade numbers, Canada’s export story is becoming more balanced,” said economist Jasleen Trehan at the Business Data Lab and Canadian Chamber of Commerce in a statement.
“The next challenge is making sure this momentum is driven by stronger export volumes, not just higher prices. That’s what will determine whether today’s gains translate into long-term economic growth or not.”
The Iran war brought container ship traffic near the Strait of Hormuz region to a near standstill as Iran threatened to attack any ships attempting to pass through the narrow shipping channel without permission during the conflict, jeopardizing about a fifth of the world’s oil and other resource supplies.
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One of those other resources was sulphur, Statistics Canada says, and Canada’s exports of sulphur products, along with diamonds and other non-metallic minerals, were up 37 per cent in May.
Demand for Canada’s crude oil from international markets increased significantly during the first three months of the Iran war, but that changed in May when Statistics Canada said crude oil exports dropped 5.4 per cent, after an increase of 43 per cent from February through April.
Crude oil prices were riding a roller-coaster during the Iran war, so the agency says that price volatility means it may need to revise some of its data down the line.
There was still strong global demand for other Canadian energy resources in May, which Canada’s economy benefited from. There was a 55 per cent spike in demand for nuclear fuel, while natural gas exports increased 7.4 per cent and refined petroleum energy products were up by 4.6 per cent.
Canada also exported a lot of aluminum products in May, as U.S. President Donald Trump’s sectoral tariffs, including on Canada’s steel and aluminum imports, continued to bite. There is currently a U.S. tariff of as much as 50 per cent on Canadian core aluminum products, while some derivatives like auto parts may see less of a tariff.
Prime Minister Mark Carney vowed to double Canada’s exports to countries other than the U.S. over the next decade, and Tuesday’s report shows that may be working.
Statistics Canada says there was a more than 50 per cent increase in exports of aluminum products in May compared to April, the majority of which were sent to the Netherlands, Italy and Greece. In total, those aluminum exports were valued at $1.2 billion, which was the highest since the record seen in May 2022.
Although Canada exported more goods to international partners in May compared to the previous month, exports to the U.S. still increased by 1.5 per cent in May, which marked the fourth consecutive increase. At the same time, imports from the U.S. fell by 1.4 per cent, which contributed to a wider trade surplus with the U.S. totalling $11.6 billion in the month.
This was the largest trade surplus with the U.S. since the record high seen in January 2025, the agency says.
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