Canada’s trade balance returns to deficit as imports surge

Merchandise imports increased 5.8 percent, while exports were up 0.3 percent

Statistics Canada announced that following two consecutive monthly trade surpluses, the country’s merchandise trade balance returned to a deficit position, moving from a surplus of $1.4 billion in February to a deficit of $1.1 billion in March.

The federal agency report that total imports rose 5.5% in March to $51.8 billion, the highest level observed since May 2019. All product sections posted increases.

Imports of energy products (+54.7%) posted the strongest gain in March. Imports of refined petroleum products contributed the most to the monthly growth, rising from $279 million in February to $726 million in March, as a result of higher imports of motor gasoline. Crude oil imports (+19.4%) also rose, topping $1 billion for the first time since September 2020. Imports of motor vehicles and parts were up 4.6% in March.

Total exports edged up 0.3% to $50.6 billion. Exports of non-energy products rose 2.0% to $41.2 billion, the third highest level on record. Exports of motor vehicles and parts rose 10.2%. Exports of metal ores and non-metallic minerals were up 33.0% in March. Partly offsetting these increases, exports of energy products fell 6.7% in March.

Canada’s trade deficit with countries other than the United States narrowed from $5.9 billion in February to $5.4 billion in March. Exports to those countries rose 12.6% and imports were up 5.9%.

Exports to the United States fell 3.8% in March, while imports rose 5.2%. After the two largest surpluses since 2008 were posted in January and February, the trade surplus with the United States narrowed from $7.3 billion in February to $4.3 billion in March.