High energy prices fuel surge in Canadian exports in second quarter
Tomas Kauer 
Higher oil prices helped push Canadian exports to their fastest quarterly gain in almost six years in the second quarter, a period capped by a fourth consecutive monthly trade surplus in June.
Total exports rose by 13.1 per cent for the quarter, while imports increased by 4.2 per cent.
It was the strongest increase in exports since the third quarter of 2020, according to Statistics Canada data published on Tuesday.
In real or volume terms, exports were up 5.4 per cent while imports were up 1.4 per cent.
“These numbers support the idea that the economic bounce back from a weak first quarter of 2026 will definitely be there,” said Marc Ercolao, an economist at TD Economics. “The question is how high is it going to be. Growth in the second quarter of 2026 is definitely stronger.”
For the month of June, Canada’s global trade surplus widened slightly to $3.9 billion from $3.7 billion in May, marking the fourth consecutive surplus.
Merchandise exports edged up by 0.4 per cent to a record $77.5 billion due to higher exports of gold to the United Kingdom and higher purchases of Canadian-held gold by foreign residents — an increase of around 27.9 per cent — which helped offset lower exports of energy products as crude oil prices fell from recent highs.
In volume terms, total exports were up 1.1 per cent in June.
Meanwhile, imports edged up by 0.2 per cent to an all-time high of $73.6 billion, as computer imports, especially of processing units used in data centres, soared.
Higher prices also helped contribute to the monthly increase in total imports. In volume terms, total imports were down by 1.5 per cent.
However, Ercolao noted that the annual Canada-U.S.-Mexico Agreement reviews and the new 50 per cent tariffs that are set to take effect on Aug. 19 will likely prolong uncertainty in the Canadian economy, even if trade with the U.S. improves.
“We think trade is going to follow the same pattern it’s been following since the start of tariffs, and that pattern is one of exceptional volatility. We’ve seen both growth and contractions in export and import activity, and that’s likely to continue,” Ercolao said.
“It wouldn’t be surprising if we see export activity moderate a little bit in the third quarter of 2026…. We might see a front-running of import activity in the U.S. to get ahead of some of these tariffs, similar to what we saw early last year. That’ll also cause a little volatility in the trade numbers.”
Statistics Canada officials noted, however, that the depreciation of the Canadian dollar affected import and export values in June because most transactions are completed in U.S. dollars and must be converted.
When the Canadian dollar depreciates against the U.S. dollar, monthly trade values expressed in Canadian dollars will be higher. On average, the value of the Canadian dollar decreased by 1.7 cents U.S. in June compared with May, the largest monthly decrease since October 2022.
The Canadian dollar is now trading at 71.08 cents U.S., compared with 72.89 cents U.S. at the beginning of the year (Jan. 2).
If expressed in U.S. dollars, Canadian exports decreased by two per cent in June while imports were down 2.1 per cent.
“But the more important point for economic growth is that real export volumes also improved in the second quarter,” Ercolao noted.
“The strength wasn’t just coming from this currency translation. It was also supported by stronger underlying trade. When we look at real GDP in volume terms, Statistics Canada will strip out these price and exchange rate effects. Anything to do with the strength in exports related to the Canadian dollar, it’s only on the nominal side.”
