Canadian exports to the United States continued to decline in May, but trade with other countries surged to a record high, helping narrow the nation’s merchandise trade deficit. According to Statistics Canada, the deficit shrank to $5.9 billion in May, down from a revised $7.6 billion in April, as strong gold shipments helped boost overall export numbers.
The early part of 2025 saw a rush of export activity as Canadian businesses moved quickly to get ahead of new U.S. tariffs. However, that surge has faded, with slower activity recorded in April and May. StatCan’s data showed that, excluding metal and non-metallic mineral products, total exports declined by 1.2 per cent in May. Exports to the U.S. fell 0.9 per cent, marking the fourth consecutive monthly decline as the trade dispute with Washington drags on.
Canada’s reliance on the U.S. as its main export market also weakened. Just 68.3 per cent of Canadian exports were U.S.-bound in May, a sharp drop from the 2024 monthly average of 75.9 per cent. BMO senior economist Shelly Kaushik noted that this figure marks the lowest proportion since 1997, not including the pandemic years.
In contrast, exports to countries other than the U.S. jumped by 5.7 per cent in May, reaching an all-time high of $47.6 billion. That figure represents a third consecutive monthly record. Total exports increased 1.1 per cent to $60.8 billion, with metal and non-metallic mineral products leading the way, up 15.1 per cent. A significant 30.1 per cent rise in shipments of unwrought gold, silver, and platinum group metals—mainly gold—was a key driver. Much of that gold was shipped to the United Kingdom.
Other standout destinations for Canadian exports included Singapore, where crude oil shipments increased, and Italy, which saw higher imports of Canadian aluminum and pharmaceuticals. These gains helped offset falling exports to China.
While the May figures showed some positive momentum, Kaushik warned that Canadian exporters will continue to face headwinds. With the U.S. doubling tariffs on steel and aluminum in June, and only modest improvement in oil prices, the outlook remains uncertain.
On the import side, total goods coming into Canada dropped 1.6 per cent in May to $66.7 billion. Imports of metal and non-metallic mineral products were down 16.8 per cent, including a steep 43.2 per cent plunge in unwrought gold, silver, and platinum group metals.
Measured by volume, total exports rose 0.7 per cent in May, while imports declined 0.6 per cent, reflecting a subtle but notable shift in Canada’s evolving trade patterns.
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