| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | C$-1.5B | C$-2.0B to C$0.9B | C$-0.51B | C$-1.5B | C$-1.4B |
| Imports - M/M | -1.5% | 0.8% | |||
| Imports - Y/Y | 9.5% | 10.7% | |||
| Exports - M/M | -0.2% | -5.5% | |||
| Exports - Y/Y | 10.2% | 6.1% |
Highlights
Canada recorded a smaller than expected merchandise trade deficit in March of -C$506 million, following a downwardly revised C$1.4 billion (previously C$1.5 billion) deficit in February, and compared to a -C$1.5 billion consensus in the Econoday survey of forecasters.
March saw the U.S. introduce broad tariffs on imports of Canadian goods, including a 25 percent duty on steel and aluminum, with Canada responding with retaliatory tariffs on U.S. goods.
Exports dipped 0.2 percent (the second consecutively monthly rise), after a 5.4 percent drop in February, while imports saw a 1.5 percent decline building on a 0.8 percent rise in February.
Exports soared by 10.2 percent compared to March 2024, while imports surged 9.5 percent from the same month a year ago.
The decrease in total exports in March 2025 also coincided with the implementation of new US tariffs on Canadian goods, Statscan said. Exports to the U.S. fell by 6.6 percent, although the decrease was almost entirely offset by a 24.8 percent jump in exports to other countries.
Exports of consumer goods (-4.2 percent) saw the biggest drop in March, with broad-based declines in several different product groupings. Exports of pharmaceutical products (-7 percent) also contributed to the decrease, mainly due to lower exports to the U.S.
The largest biggest drivers of the monthly drop in imports were metal and non-metallic mineral products (-15.8 percent) and energy products (-18.8 percent). In real terms, total imports saw a 0.1 percent downtick in March.
On a quarterly basis, exports jumped 6 percent in the first quarter of 2025, after a 4.6 percent spike in Q4 2024. The exports of energy products (+7.5 percent) and motor vehicles and parts (+13.2 percent) were the largest contributors to the increase.
Imports rose by 5.2 percent in the first quarter, after a 2.8 percent increase in the fourth quarter. Imports of motor vehicles and parts (+9.1 percent), industrial machinery, equipment and parts (+10.6 percent) and consumer goods (+4.9 percent) contributed the most to the increase.
As a result, Canada's quarterly merchandise trade deficit went from -C$461 million in the fourth quarter of 2024 to a C$1.2 billion surplus in the first quarter of 2025.
March saw the U.S. introduce broad tariffs on imports of Canadian goods, including a 25 percent duty on steel and aluminum, with Canada responding with retaliatory tariffs on U.S. goods.
Exports dipped 0.2 percent (the second consecutively monthly rise), after a 5.4 percent drop in February, while imports saw a 1.5 percent decline building on a 0.8 percent rise in February.
Exports soared by 10.2 percent compared to March 2024, while imports surged 9.5 percent from the same month a year ago.
The decrease in total exports in March 2025 also coincided with the implementation of new US tariffs on Canadian goods, Statscan said. Exports to the U.S. fell by 6.6 percent, although the decrease was almost entirely offset by a 24.8 percent jump in exports to other countries.
Exports of consumer goods (-4.2 percent) saw the biggest drop in March, with broad-based declines in several different product groupings. Exports of pharmaceutical products (-7 percent) also contributed to the decrease, mainly due to lower exports to the U.S.
The largest biggest drivers of the monthly drop in imports were metal and non-metallic mineral products (-15.8 percent) and energy products (-18.8 percent). In real terms, total imports saw a 0.1 percent downtick in March.
On a quarterly basis, exports jumped 6 percent in the first quarter of 2025, after a 4.6 percent spike in Q4 2024. The exports of energy products (+7.5 percent) and motor vehicles and parts (+13.2 percent) were the largest contributors to the increase.
Imports rose by 5.2 percent in the first quarter, after a 2.8 percent increase in the fourth quarter. Imports of motor vehicles and parts (+9.1 percent), industrial machinery, equipment and parts (+10.6 percent) and consumer goods (+4.9 percent) contributed the most to the increase.
As a result, Canada's quarterly merchandise trade deficit went from -C$461 million in the fourth quarter of 2024 to a C$1.2 billion surplus in the first quarter of 2025.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Nominal data are supplied with regards to principal trading partners and product classification.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. This is particularly true for Canada which relies on exports and particularly those to the U.S. for growth. It should be noted that this report focuses solely on goods trade - it leaves services trade for the quarterly national accounts and balance of payments reports.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
