Canada experienced a positive shift in its trade balance in March, moving from a deficit to a surplus. This change was driven by increased exports, particularly in crude oil and gold, along with a decrease in imports. Statistics Canada reported a surplus of $1.78 billion for the month, marking the first surplus in six months.
The surge in crude oil prices, influenced by global events such as the conflict in Iran, led to a boost in Canada’s export revenues. Additionally, despite a drop in gold prices, the strong global demand for the precious metal contributed to further export growth.
Total exports in March increased by 8.5%, reaching $72.8 billion. Significant increases were seen in the metal and non-metallic product export category, which hit a record high with a 24% rise, and energy exports, reaching their highest levels since September 2022 with a 15.6% increase.
Apart from these sectors, Canada’s exports saw a moderate 1.1% increase in value but a slight 0.3% decrease in volume. Notably, following a substantial rise in February, exports of motor vehicles and parts saw a 4.5% increase in March.
The U.S. remained an important trade partner for Canada, with exports rising by 8.3% to $48.51 billion in March. However, imports from the U.S. decreased by 1.2% to $41.44 billion. Canada’s trade surplus with the U.S. reached $7.1 billion, the highest in six months, while its share of exports to the U.S. dropped to a record low of 66.7%. This trend is impacted by ongoing trade tensions and tariffs imposed by the U.S.
On the other hand, Canada’s exports to non-U.S. countries hit a new high in March, increasing by 9.1%. Meanwhile, imports from non-U.S. countries decreased by 2.2%.
Following the release of the trade data, the Canadian dollar saw a slight uptick of 0.03% to 1.3620. There are expectations in the money markets for potential rate cuts by the Bank of Canada before the year-end.