| Consensus | Consensus Range | Actual | Previous | Revised | |
| Balance | C$-3.4B | C$-3.8B to C$-2.0B | C$1.779B | C$-5.743B | C$-5.112B |
| Imports - M/M | -1.6% | 8.4% | 9.4% | ||
| Imports - Y/Y | 2.5% | 3.8% | 3.9% | ||
| Exports - M/M | 8.5% | 6.4% | 6.8% | ||
| Exports - Y/Y | 8.8% | -2.6% | -2.5% |
Highlights
Canada's merchandise trade balance unexpectedly swung to a surplus of C$1.779 billion in March, the first since September 2025, from a deficit of C$5.112 billion in February, while forecasters in an Econoday survey had expected a deficit ranging from C$2.0 billion to C$3.8 billion. March data provide the first look at the economy following the start of the Middle East conflict.
Imports contracted 1.6 percent in March after rebounding 9.4 percent in February, but were still up 4.6 percent in the first quarter.
By contrast, exports expanded a further 8.5 percent after 6.8 percent in February to C$72.8 billion, reaching their highest level since January 2025. Total exports were up 3.5 percent in the first quarter.
Despite the March surplus, the trade deficit widened to C$6.5 billion in the first quarter from C$4.2 billion in the fourth quarter of 2025.
In March, export gains were mostly price related, as volumes were down 0.3 percent, for a quarterly decline of 0.6 percent, while real imports rose 3.3 percent.
Much the export boost came from energy and metal and non-metallic mineral products. The latter were up 24.0 percent on the month (69.7 percent year-over-year) after rising 11.9 percent in February. Exports of gold, notably to the UK, drove the gain, which was reflected in a 37.7 percent increase in unwrought gold, silver, and platinum group metals, and their alloys, a category largely composed of unwrought gold. In March, gold market prices fell.
Energy was also an important driver of exports in March, with a 15.6 percent gain (26.6 percent year-over-year) to C$17.1 billion, the highest levels since September 2022, led by crude oil, which rose 18.9 percent as prices increased as a result of the conflict in Iran. Statistics Canada warned that revisions to crude oil export estimates tend to be larger during times of high price volatility.
Today's data illustrate the divergent impacts of higher oil prices on Canada, a net oil exporter: higher inflation, higher oil revenues but heightened uncertainty related to U.S. trade policies and the Middle East conflict."Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices," the Bank of Canada said in its latest policy statement.
Excluding energy and metal and non-metallic mineral products, exports were up a more modest 1.1 percent from February.
Overall, exports increased in 7 of 11 categories, including a 4.5 percent advance in motor vehicles and parts following a 24.9 percent increase in February.
Imports decreased in 8 of 11 categories in March, mostly due to lower activity, as volumes dropped 2.0 percent. Imports of consumer goods were down 3.9 percent, with pharmaceutical being the largest downward contributor (down 9.3 percent). Other declines included clothing, footwear and accessories (down 4.2 percent), other food products (down 4.1 percent), and miscellaneous goods and supplies (down 2.7 percent).
Regionally, the trade surplus with the U.S. widened significantly, to C$7.1 billion in March from C$2.9 billion in February, as imports fell 1.2 percent while exports rose 8.3 percent.
Trade with countries other than the U.S. followed a similar pattern: exports increased 9.1 percent to a new record high of C$24.3 billion, while imports contracted 2.2 percent. The trade deficit narrowed to C$5.3 billion in March, the smallest since January 2021.
When also including services, Canada's total trade balance went from a deficit of C$5.0 billion in February to a surplus of C$1.7 billion in March.
Market Consensus Before Announcement
The consensus sees a deficit of C$3.4billion in March after a C$5.743 billion deficit in February.
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.