By Robb M. Stewart
OTTAWA--Canada's goods-trade surplus widened to a 15-month high as shipments of crude oil and vehicles to the U.S. helped lift exports to a record.
The country recorded a merchandise-trade surplus of 2.72 billion Canadian dollars, the equivalent of about US$1.95 billion, Statistics Canada said Tuesday. This was slightly above the positive C$2.55 billion trade balance economists expected.
The spike in energy prices with the war in Iran again inflated the value of exports and led to gains across other goods, more than making up for a sharp pull back in volatile gold shipments. In volume terms, exports built on the rise seen the month before, signalling net trade should be a tailwind for quarterly gross domestic product after dragging on the economy to start the year.
Canada has now racked up trade surpluses in two of the last seven months, following a revised C$1.75 billion surplus in March.
"Given that the U.S. is the primary destination for our energy exports, it was perhaps not surprising to see Canada's merchandise-trade surplus with its southern neighbour reach its highest level in over a year," said Jocelyn Paquet, senior economist at National Bank of Canada. "However, the rise in exports in April wasn't just about energy."
The Bank of Canada has singled out trade relations with the U.S. and the evolving war in the Middle East as the two main risks faced by Canada's economy. U.S. sectoral levies on steel and other goods and worries over the renegotiation of the North American trade pact continue to hold back business investment and exports, while the war-induced spike in oil prices has lifted gasoline costs but increased export revenue.
Trade with the U.S. has recovered in recent months from the blow of last year's tariffs, and has been buoyed by the rise in energy prices since the conflict in the Middle East erupted. U.S.-bound exports have risen for three successive months, and in
April widened the long-standing trade surplus between the countries to C$9.48 billion, the most since February 2025.
Exports to countries beyond the U.S. fell in April, though mainly thanks to a drop in unwrought gold sent to the U.K. and after hitting a fresh all-time high the month before, widening Canada's trade deficit with non-U.S. countries.
Overall exports of Canadian goods increased 1.6% from the month before to C$75.16 billion, and jumped almost 25% from a year earlier. At the same time, the value of imports edged up 0.3% during April to a record C$75.44 billion, the national data agency said.
Shipments to the U.S. were up 4.8%, driven by oil, passenger cars and light trucks, and imports from Canada's nearest neighbor rose 1.6%.
Despite a record roughly C$3.8 billion in exports to China for the month, shipments to countries other than the U.S. were down 4.8% and imports were 1.5% lower at a time when Prime Minister Mark Carney's government is pushing to lessen Canada's reliance on trade with America.
Alongside a rise in exports of energy products and vehicles, Canada shipped out more grain and other farm and food products in April. Exports of industrial machinery, equipment and parts also rose, as did aircraft and other transportation equipment. Exports of basic and industrial chemicals, plastics and rubber products all increased as well.
Canada's economy contracted for a second consecutive quarter to begin 2026, albeit only marginally, as a dip in exports was outshone by a surge in imports of gold. That has ignited suggestions the country has slipped into a recession, though the latest trade data backs Statistics Canada's earlier flash estimate that GDP rose 0.4% in April from the month before.
The Bank of Canada will decide on the path for interest rates Wednesday. Its governing council has left the policy interest rate unchanged for four meetings in a row, and is widely expected to remain on the sidelines through the rest of the year as it balances a sluggish economy against the risk that the jump in prices at the pump pushes broader inflation higher.
"Recent trade data suggest that Canadian exports have largely recovered back to pre-2025 levels, albeit still with some weakness in sectors hit hardest by U.S. tariffs," CIBC Capital Markets senior economist Andrew Grantham said.
Grantham and other analysts expect that lingering tariff uncertainty as renegotiation of the U.S.-Mexico-Canada trade deal drags on may limit upside momentum in Canadian trade in the near-term, even if net trade does prove to be a solid contributor to second-quarter GDP
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
06-09-26 1207ET
