Canada experienced a shift to a trade surplus in March due to a rise in crude oil prices and strong demand for gold, leading to a notable increase in exports as imports decreased. Statistics Canada reported a surplus of $1.78 billion for the month, a significant improvement from the previous month’s $5.11 billion deficit.
This marked the first surplus in six months for Canada, driven by heightened crude oil prices amid the conflict in Iran, which boosted export values. Although gold prices saw a decline, global demand for the precious metal contributed to further export growth.
Analysts had predicted a deficit of $2.88 billion, but total exports surged by 8.5% to $72.8 billion in March. This increase was supported by a 24% rise in metal and non-metallic product exports, reaching a record high, along with a 15.6% uptick in energy exports, hitting their highest level since September 2022, according to StatsCan.
Excluding these categories, Canada’s exports showed a modest 1.1% increase in value but a slight 0.3% dip in volume. Following a 24.9% spike in February, motor vehicle and parts exports rose by 4.5% in March, as reported by the statistics agency.
In terms of trade with the U.S., higher crude oil prices and increased shipments of passenger cars and light trucks led to an 8.3% growth in Canada’s exports to the U.S., reaching $48.51 billion in March, the highest in a year. Meanwhile, imports from the U.S. decreased by 1.2% to $41.44 billion. The trade surplus with the U.S. hit a six-month peak at $7.1 billion, with Canada’s share of exports to the U.S. dropping to a record low of 66.7%.
Canada’s exports to non-U.S. countries also reached a new high in March, with a 9.1% increase, while imports from countries other than the U.S. fell by 2.2% for the month.
Following the trade data release, the Canadian dollar saw a 0.03% increase to 1.3620. Market expectations include two 25-basis point rate cuts by the Bank of Canada by the end of the year.