Canada’s trade balance shifted to a surplus in March as exports surged due to higher crude oil prices and increased demand for gold, while imports decreased, according to data released on Tuesday. Statistics Canada reported a surplus of $1.78 billion in March, a significant turnaround from the $5.11 billion deficit recorded in the previous month. This marked the first surplus for Canada in six months, driven by the spike in crude oil prices amid the conflict in Iran, boosting export values. Although gold prices decreased in March, the global demand for the precious metal continued to support export growth.
Analysts had predicted a deficit of $2.88 billion, but total exports increased by 8.5% to $72.8 billion. The surge in exports was led by a 24% rise in metal and non-metallic product exports to a new high, along with a 15.6% increase in energy exports to their highest level since September 2022, as reported by StatsCan. Excluding these categories, Canada’s exports saw a modest 1.1% increase in value and a slight 0.3% decrease in volume.
Following a 24.9% boost in February, exports of motor vehicles and parts grew by 4.5% in March, according to the statistics agency. Higher crude oil prices and an increase in shipments of passenger cars and light trucks pushed Canada’s exports to the U.S. up by 8.3% to $48.51 billion, marking the highest level in a year. In contrast, imports from the U.S. decreased by 1.2% to $41.44 billion, resulting in a trade surplus of $7.1 billion with the U.S., the highest in six months. However, Canada’s share of exports to the U.S. dropped to a record low of 66.7%, amid the ongoing trade tensions with the U.S. and the imposition of tariffs by President Donald Trump.
In March, Canada set a new record for exports to countries other than the U.S., which increased by 9.1%, while imports from non-U.S. countries declined by 2.2%. Following the release of the trade data, the Canadian dollar saw a slight 0.03% increase to 1.3620. Money markets are anticipating two 25 basis point rate cuts by the Bank of Canada by the end of the year.