ICBA EconoBot | Record Exports Push Trade Surplus to Four-Year High

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Record Exports Push Canada’s Trade Surplus to a Four-Year High

Canada’s merchandise trade surplus widened to $4.2 billion in May — a third consecutive monthly surplus and the largest in four years — as exports rose 0.9% to a record $77.1 billion. Economists had pencilled in a $2.85-billion surplus; the beat was powered almost entirely by commodities. Unwrought aluminum shipments jumped 50.7% to $1.2 billion, metal ores and non-metallic minerals surged 16.1%, and natural gas exports climbed 7.4% — western resources doing the heavy lifting for the national economy, again. The surplus with the United States hit $11.6 billion, the largest since January 2025, even as Ottawa presses Washington for tariff relief. Before anyone pops champagne: BMO’s Robert Kavcic notes oil-driven surpluses can vanish as quickly as they appear, calling May “probably the high watermark for now.” The lesson for policymakers is one ICBA has hammered for years: when Canada builds and ships its resources, the country prospers.

THE NUMBERS — STATISTICS CANADA

Canadian International Merchandise Trade, May 2026 — Released today. Exports up 0.9% to a record $77.1B, a fourth straight monthly gain (+22.2% over that stretch); imports edged down 0.2%. Crude oil exports slipped 5.4% on volumes, but nuclear fuel (+55.1%) and natural gas (+7.4%) picked up the slack. Statistics Canada

Study: Investors in Residential Real Estate — Released today. So much for the “corporate landlord” bogeyman: small-scale investors (five or fewer properties) own the largest share of rental property value in five of the six provinces studied, including B.C., while institutional investors own just 0.1% to 0.4% of houses. Mom-and-pop landlords are the backbone of Canada’s rental supply. Statistics Canada

FROM THE ECONOMISTS

BMO Economics — Cdn. Merchandise Trade (May) — Oil is Well — The third consecutive improvement from the deep deficits of early 2026, but with oil prices retreating, don’t bank on surpluses this size sticking around.

RBC Economics — Q2 Business Outlook Survey: Surprisingly Robust Firm Sentiment — Business investment intentions strengthened again, marking the strongest first half since 2022, led by natural resources firms. RBC expects the BoC to stay on hold through 2026. Good news for industrial contractors.

BMO Economics — BoC BOS and SCE (Q2) — Bad News is Old News — The survey is not a comforting read — the share of firms budgeting for a recession nearly doubled to 17% — but it was taken in May, when oil averaged US$101; prices have since fallen sharply.

WORTH WATCHING

Bank of Canada Decision, July 15 — A hold at 2.25% is the consensus call, but the accompanying Monetary Policy Report matters more. Monday’s Q2 Business Outlook Survey showed softer sentiment but rising inflation expectations — a combination that shelves rate relief and keeps borrowing costs elevated for builders and buyers alike.

CUSMA Review Talks — Canadian, American and Mexican officials met July 1 to open review negotiations. Ottawa’s top ask: relief from tariffs on steel, aluminum, autos and softwood lumber. Washington is signalling Canada will have to live with some tariffs — and every month they linger adds cost to construction materials.

West Coast Oil Pipeline — Alberta’s proposal for a $35–44 billion Trans Mountain-led pipeline from Edmonton to the B.C. coast is now before the Major Projects Office. A generational construction opportunity for both provinces — if the approval process is truly committed to getting to yes.

IN BRIEF

Enbridge — Construction begins this month on the $4-billion Sunrise Expansion, a 139-km natural gas pipeline build in B.C. adding 300 million cubic feet per day of capacity to feed LNG demand. In-service target: late 2028.

BMO Economics — Provincial Credit Watch: July 2026 — The latest read on provincial fiscal fundamentals lands as deficits keep piling up in Victoria and beyond.

The ICBA EconoBot is an AI-powered briefing trained in the analytical perspective and policy interests of ICBA Economics. Prepared with data from Statistics Canada, bank economics desks, and policy research institutes.