OTTAWA—Canada's trade gap widened more than expected in May as non-energy exports fell, indicating that Canadian exporters outside the oil patch are struggling despite a weaker Canadian dollar and a strengthening U.S. economy.

Canada posted a trade deficit of 3.34 billion Canadian dollars ($2.64 billion), compared with a slightly revised C$2.99 billion deficit in April, Statistics Canada said Tuesday. Expectations were for a trade gap of C$2.50 billion, according to economists at Royal Bank of Canada.

The disappointing report "only reinforces our conviction for a Bank of Canada rate cut next week," said Jimmy Jean, economist at Desjardins Capital Markets. "The trade picture is not improving at all."

Exports overall fell for a fifth straight month, marking the longest streak of declines since the global financial crisis. Notably, non-energy exports declined again after falling in April, a result sure to disappoint Canadian policy makers hoping sales abroad of those goods would drive an economic recovery starting midyear. Canada's economy was hobbled in the first quarter by the sharp drop in prices for crude oil, its biggest export.

The Canadian dollar touched a new 14-week low versus the U.S. dollar Tuesday, as the weak trade data, along with falling oil prices and worries over Greece, contributed to a withdrawal from the currency.

Mr. Jean said the declines among exporting sectors was widespread and of significant magnitude. That suggests factory sales might have declined in May, he added, and provides more evidence of a possible recession as the economy is likely to have shrunk in the second quarter.

Meanwhile, the U.S. in May posted its first trade surplus with Canada in at least 25 years. That country's trade gap with Canada has narrowed recently because of lower U.S. demand for foreign oil amid increased domestic production.

Tuesday's trade report was the first major Canadian indicator for May, and came on the heels of last week's disappointing monthly gross domestic product report, which indicated the country's gross domestic product unexpectedly shrank 0.1% in April.

The trade report "epitomizes the challenge the Canadian economy is facing," said David Tulk, chief Canada strategist for TD Securities. "You are seeing weakness across the commodity complex, and you are not getting enough of a positive offset from the parts of the economy that should be better in here."

Statistics Canada said the value of exports fell 0.6% in May to C$42.00 billion, the lowest level in 17 months. Export volumes fell 2.5% while prices rose 1.9%. Energy exports rose 1.3%, although volumes fell 6.5%. Sales of Canadian non-energy goods abroad declined 1.0% on a 1.2% decrease in volumes.

Canadian imports advanced 0.2% on an increase in volumes and slightly lower prices.

Prior to the data release, market watchers cast the odds of a rate cut on July 15, the next policy decision from the Bank of Canada, at 44%. Those odds, based on trading in the overnight-index-swap market, climbed to 51% following the trade report's release, according to Benjamin Reitzes, economist at BMO Capital Markets.

Eric Morath contributed to this article.

Write to Paul Vieira at paul.vieira@wsj.com

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