Canada’s merchandise trade balance swung back into surplus in March, ending a six-month stretch of deficits.
Exports rose 8.5% to $72.8 billion, while imports fell 1.6% to $71.0 billion. The trade balance shifted to a $1.8 billion surplus from a $5.1 billion deficit in February.
The increase in exports was not broad-based. In volume terms, exports slipped 0.3%, showing that higher prices, not stronger demand, drove most of the gain. Excluding energy and metals, exports rose just 1.1%.
Gold exports led the increase. Shipments of unwrought gold and related metals jumped 37.7%, pushing total metal and mineral exports up 24.0% to a record $15.3 billion. Most of the increase went to the United Kingdom. The rise came despite a drop in gold prices during the month, pointing to timing and market factors rather than steady demand.
Energy exports also climbed. Crude oil exports rose 18.9% as prices increased amid uncertainty linked to the conflict in Iran. Total energy exports reached $17.1 billion, the highest level since September 2022. These figures may be revised due to price volatility.
Manufacturing showed some improvement. Exports of motor vehicles and parts rose 4.5%, with passenger cars and light trucks leading the gains. The increase reflects higher production in recent months, though the sector remains uneven.
Imports declined after hitting a record in February. Consumer goods imports fell 3.9%, led by a drop in pharmaceutical products following a surge the month before. Imports of aircraft fell sharply, down 64.4%, after several large purchases from the United States in February.
Canada’s trade surplus with the United States widened to $7.1 billion. Exports to the U.S. rose 8.3%, mainly due to oil and autos, while imports edged down.
Trade with other countries improved but stayed in deficit. Exports to non-U.S. markets reached a record $24.3 billion for a second straight month, with higher shipments to the United Kingdom and Europe. The deficit with these countries narrowed to $5.3 billion but remains significant.
Quarterly data shows a weaker picture. The trade deficit widened to $6.5 billion in the first quarter, as imports grew faster than exports. In real terms, export volumes declined while import volumes increased.
Services trade added little support. Exports rose slightly, but imports increased faster, leaving a small overall surplus when goods and services are combined.
March’s surplus reflects strong commodity prices more than a shift in trade fundamentals. Export volumes remain soft, and the broader trend still points to pressure on Canada’s trade balance.