(May 5): Canada posted its first trade surplus in six months due to surging exports of gold and oil in March as the Iran war drove up global uncertainty.
A strong increase in exports and a decline in imports resulted in a C$1.8 billion trade surplus, which followed a C$5.1 billion deficit the previous month, Statistics Canada (StatCan) reported on Tuesday.
Economists surveyed by Bloomberg expected the deficit had shrank to C$2.5 billion in March.
March marked the first trade surplus since September 2025, as Canadian resource exporters reaped a windfall from the conflict in the Middle East.
The data were released at the same time as US figures showed that country’s trade deficit widened in March. The two-year Canadian government bond yield was down about three basis points on the day to 3.024% as global bonds found some respite, while the loonie was steady at C$1.3626 per US dollar, as of 8.52am in Ottawa.
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Overall exports rose by 8.5%, reaching the highest level since January 2025. The increase was driven by a 24% rise in metal and non-metallic product exports, which reached a record C$15.3 billion.
Higher exports of unwrought gold, silver and platinum group metals and their alloys contributed the most to the monthly change, with the increase driven by higher gold exports to the UK. StatCan noted that higher gold exports coincided with lower gold market prices that month.
Meanwhile, higher prices for crude oil drove energy exports up by 15.6%, reaching the highest level since September 2022. Exports of crude oil in particular jumped by 18.9%.
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Exports of motor vehicles and parts also rose by 4.5% in March, following a 24.9% increase in February. Passenger cars and light trucks contributed the most to the increase as production of those vehicles expanded.
In volume terms, total exports decreased by 0.3%.
Imports in March fell by 1.6% after reaching a record high in February, declining in eight of 11 product sections. The decrease was driven by lower consumer goods imports as imports of pharmaceutical products fell by 9.3%.
Imports in volume terms fell by 2%.
“Overall, today’s [Tuesday] data confirm that higher global energy prices are helping Canada’s nominal trade position, but not yet leading to much improvement in the volume of economic activity,” Andrew Grantham, senior economist at Canadian Imperial Bank of Commerce, said in a report to investors.
Canada’s trade surplus with the US widened to C$7.1 billion, marking the highest level since September 2025. The trade surplus widened as exports to south of the border rose by 8.3%, reaching the highest level in a year. Exports of crude oil as well as passenger cars and light trucks drove the increase, while imports from the US fell by 1.2% amid lower imports of aircraft.
Exports to countries other than the US hit a record high for a second consecutive month, rising by 9.1%. The increase was driven by high gold exports to the UK as well as crude oil to Germany and the Netherlands. Imports to countries other than the US fell by 2.2%.
Canada’s trade deficit with the world narrowed to C$5.3 billion from C$8 billion in March, marking the smallest deficit since January 2021.
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