After a disappointing GDP report for the first quarter of the year, Canada’s economy got some good news this morning on the export front.

The value of Canada's merchandise exports* increased by 1.6% in April. At $75.2 billion, nominal exports in April are the highest on record. In volume terms, total exports were up by 3.0% for a third consecutive monthly increase, reinforcing our view that exports will start adding to GDP growth in Q2.

As such, April’s trade numbers add to the positive labour force data for May that saw the country add 88,000 jobs. It’s still early, but these two reports suggest that the national economy might be finding its legs after two consecutive quarters of negative growth.

Three of Canada’s most important trade sectors—energy, food, and autos—drove the improvement with higher oil prices, strong wheat and canola sales, and increased vehicle production pushing up exports from all three industries. The value of crude oil exports was up by 7.0% to the highest level on record. 

Exports of farm, fishing and intermediate food products increased by 8.9% in April; exports of motor vehicles and parts rose by 5.9%.

Sales to the U.S. increased by 4.8% in April while exports to countries other than the U.S. decreased by the same percentage. The decline was driven by reduced exports of gold to the United Kingdom. If sales to the U.K. are excluded, exports to non-U.S. destinations went up by 3.5% to reach an all-time high. Canada’s exports to China also reached a record high in April.

With oil prices remaining elevated, export value will also be strong in May. Longer term, the outcome of the review of the Canada-United States-Mexico Agreement (CUSMA) will be a key factor. Our base case assumes that the end result of the negotiations will be an effective U.S. tariff rate similar to what is currently in place.

*All data in today’s Twenty-Four have been seasonally adjusted and are on a balance of payments basis.

Answer to the previous trivia question: One in five (20%) of energy sector workers in Alberta in 2024 were 55 years of age or older (about the same as it is for all sectors).

Today’s trivia question: In what month and year did Canada’s (seasonally adjusted) merchandise exports to the U.S. reach an all-time high?