Canada’s trade balance shifted to a surplus in March due to a surge in exports driven by 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 in the previous month. This marked the first surplus for Canada in six months, fueled by elevated crude oil prices attributed to the conflict in Iran, boosting export values. Despite a decrease in gold prices, strong global demand for the precious metal continued to bolster exports.
Analysts, surveyed by Reuters, had predicted a deficit of $2.88 billion. Total exports climbed by 8.5 percent to $72.8 billion, with notable increases in metal and non-metallic product exports by 24 percent to a record high, and a 15.6 percent rise in energy exports, reaching the highest level since September 2022, as per StatsCan data. Excluding these categories, Canada’s exports saw a modest 1.1 percent increase in value but dipped by 0.3 percent in volume terms. Following a 24.9 percent surge in February, exports of motor vehicles and parts grew by 4.5 percent in March, as reported by the statistics agency.
In March, higher crude oil prices and enhanced shipments of passenger cars and light trucks led to an 8.3 percent increase in Canada’s exports to the U.S., totaling $48.51 billion, the highest level in a year. Conversely, imports from the U.S. decreased by 1.2 percent to $41.44 billion. Canada’s trade surplus with the U.S. peaked at $7.1 billion, the highest in six months, with its share of exports to the U.S. dropping to a historic low of 66.7 percent. This decline coincides with the ongoing trade tensions with the U.S., marked by President Donald Trump’s imposition of tariffs on Canadian goods to address the trade deficit.
Meanwhile, Canada’s exports to countries other than the U.S. reached a new high in March. Exports to non-U.S. nations surged by 9.1 percent, while imports from countries outside the United States decreased by 2.2 percent in the same month. Following the release of trade data, the Canadian dollar experienced a slight 0.03 percent increase to 1.3620. Market expectations indicate the potential for two 25 basis point rate cuts by the Bank of Canada by the year’s end.