Canada saw a shift to a trade surplus in March, driven by a surge in exports fueled by higher crude oil prices and strong demand for gold. Statistics Canada reported a $1.78 billion surplus for the month, a significant turnaround from the $5.11 billion deficit in the previous month. This marked the first surplus in six months for Canada, with the spike in crude oil prices due to the conflict in Iran boosting export values. Although gold prices dipped in March, global demand for the precious metal continued to support export growth.
Analysts had predicted a deficit of $2.88 billion, but total exports climbed by 8.5% to reach $72.8 billion. Notably, metal and non-metallic products exports surged by 24%, hitting a record high, while energy exports rose by 15.6%, reaching their highest level since September 2022. Excluding these categories, the overall export value increased by 1.1%, while the volume slightly decreased by 0.3%.
Following a notable increase in February, motor vehicle and parts exports rose by 4.5% in March. Higher crude oil prices and expanded shipments of passenger cars and light trucks bolstered Canada’s exports to the U.S., rising by 8.3% to $48.51 billion. In contrast, imports from the U.S. declined by 1.2% to $41.44 billion. This dynamic resulted in a trade surplus with the U.S. reaching $7.1 billion, the highest in six months, while the share of exports to the U.S. dropped to a historic low of 66.7%.
Meanwhile, Canada’s exports to countries other than the U.S. hit a new record high in March, increasing by 9.1%. Imports from non-U.S. countries decreased by 2.2% during the same period. The Canadian dollar saw a slight increase of 0.03% to 1.3620 following the trade data release, with money markets anticipating two 25 basis point rate cuts by the Bank of Canada by the year’s end.
