| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | C$-0.7B | C$-1.5B to C$0.2B | C$-7.1B | C$-0.51B | C$-2.3B |
| Imports - M/M | -3.5% | -1.5% | -1.7% | ||
| Imports - Y/Y | 3.3% | 9.5% | 8.9% | ||
| Exports - M/M | -10.8% | -0.2% | -2.2% | ||
| Exports - Y/Y | -7.0% | 10.2% | 6.7% |
Highlights
Plunging exports sent Canada's merchandise trade deficit to a record -C$7.1 billion in April from C$2.3 billion in March (previously C$506 million), topping even the largest deficit forecast of -C$1.5 billion in an Econoday survey. The consensus was for a trade gap of -C$0.7 billion.
Exports dropped 10.8 percent, the third consecutive contraction and the largest monthly decline in five years. Exports are now at C$60.4 billion, their lowest level since June 2023.
April's poor export performance was related to weaker activity as volumes were down 9.1 percent on the month. The U.S. implemented tariffs on Canadian goods in March, followed by additional tariffs in early April on motor vehicles manufactured in Canada.
Weakness was felt across sectors, as exports decreased in 10 of 11 product sections, led by a 17.4 percent plunge in motor vehicles and parts led by passenger cars and light trucks, which fell nearly 23 percent after rising 21 percent between November 2024 and March 2025. Facing U.S. tariffs on motor vehicles in early April, Canada reduced its production, leading to lower exports.
Exports of consumer goods were down 15.4 percent to C$7.0 billion, their lowest level since December 2023. Energy was down 7.9 percent, led by an 11.7 percent drop in crude oil, coinciding with lower prices amid weaker global oil demand combined with higher planned production by the Organization of the Petroleum Exporting Countries and its partners. Volumes were also down on the month.
Over the month, the Canadian dollar appreciated to an average value of 1.8 cents US compared with March, the largest monthly increase since May 2021, which impacted both import and export values. When expressed in US dollars, Canadian exports decreased 8.4 percent on the month and imports were down 0.9 percent.
Regionally, exports suffered from weak demand south of the border, as exports to the U.S. dropped 15.7 percent, while imports decreased 10.8 percent. The trade surplus with the U.S. narrowed to C$3.6 billion from C$6.8 billion, the smallest surplus since December 2020. Exports to countries other than the United States rose 2.9 percent in April, while imports rose 8.3 percent to a record C$29.0 billion, widening the deficit to -C$10.7 billion from -C$9.0 billion in March.
Imports also contracted in April, by 3.5 percent to C$67.6 billion, with volumes down 2.9 percent. Motor vehicles and parts decreased 17.7 percent, and industrial machinery, equipment and parts, a gauge of investment activity, contracted 9.5 percent. Consumer goods imports fell 4.2 percent. By contrast, imports of metal and non-metallic mineral products surged 48.8 percent, led by unwrought gold, silver, and platinum group metals. Excluding this latter category, total imports were down 6.9 percent.
When combining international trade in goods and services, Canada's total trade deficit with the world widened to C$7.5 billion in April from C$2.7 billion in March.
Exports dropped 10.8 percent, the third consecutive contraction and the largest monthly decline in five years. Exports are now at C$60.4 billion, their lowest level since June 2023.
April's poor export performance was related to weaker activity as volumes were down 9.1 percent on the month. The U.S. implemented tariffs on Canadian goods in March, followed by additional tariffs in early April on motor vehicles manufactured in Canada.
Weakness was felt across sectors, as exports decreased in 10 of 11 product sections, led by a 17.4 percent plunge in motor vehicles and parts led by passenger cars and light trucks, which fell nearly 23 percent after rising 21 percent between November 2024 and March 2025. Facing U.S. tariffs on motor vehicles in early April, Canada reduced its production, leading to lower exports.
Exports of consumer goods were down 15.4 percent to C$7.0 billion, their lowest level since December 2023. Energy was down 7.9 percent, led by an 11.7 percent drop in crude oil, coinciding with lower prices amid weaker global oil demand combined with higher planned production by the Organization of the Petroleum Exporting Countries and its partners. Volumes were also down on the month.
Over the month, the Canadian dollar appreciated to an average value of 1.8 cents US compared with March, the largest monthly increase since May 2021, which impacted both import and export values. When expressed in US dollars, Canadian exports decreased 8.4 percent on the month and imports were down 0.9 percent.
Regionally, exports suffered from weak demand south of the border, as exports to the U.S. dropped 15.7 percent, while imports decreased 10.8 percent. The trade surplus with the U.S. narrowed to C$3.6 billion from C$6.8 billion, the smallest surplus since December 2020. Exports to countries other than the United States rose 2.9 percent in April, while imports rose 8.3 percent to a record C$29.0 billion, widening the deficit to -C$10.7 billion from -C$9.0 billion in March.
Imports also contracted in April, by 3.5 percent to C$67.6 billion, with volumes down 2.9 percent. Motor vehicles and parts decreased 17.7 percent, and industrial machinery, equipment and parts, a gauge of investment activity, contracted 9.5 percent. Consumer goods imports fell 4.2 percent. By contrast, imports of metal and non-metallic mineral products surged 48.8 percent, led by unwrought gold, silver, and platinum group metals. Excluding this latter category, total imports were down 6.9 percent.
When combining international trade in goods and services, Canada's total trade deficit with the world widened to C$7.5 billion in April from C$2.7 billion in March.
Market Consensus Before Announcement
The trade account is expected to remain in deficit by C$0.7 billion after a trade gap of C$0.51 billion in March.
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.
