Canada Reports $1.78 Billion Trade Surplus in March

Canada reported a merchandise trade surplus of 1.78 billion Canadian dollars in March, equivalent to about 1.31 billion U.S. dollars, marking a significant shift from the 5.11 billion Canadian dollar deficit recorded in February. The turnaround was fueled by higher crude oil prices amid the war in Iran and surging global demand for gold, which boosted export values.

Statistics Canada released the data on Tuesday, noting that total exports climbed 8.5% to 72.8 billion Canadian dollars. Analysts polled by Reuters had anticipated a deficit of 2.88 billion Canadian dollars, making the surplus an unexpected positive development.

Excluding energy and metal products, exports grew modestly by 1.1% in value but declined 0.3% in volume. The Canadian dollar strengthened slightly by 0.03% to 1.3620 following the release.

Energy exports surged 15.6% to their highest level since September 2022, propelled by a 24% increase in the metal and non-metallic product category, which reached a record high despite falling gold prices. Motor vehicle and parts exports rose 4.5% in March, building on a 24.9% gain in February, with higher shipments of passenger cars and light trucks contributing to the uptick.

These gains occurred even as overall export volumes outside key categories showed minimal growth. The war in Iran has elevated crude oil prices, directly lifting the value of Canada's energy shipments. At the same time, global demand for gold helped offset price declines in the precious metal, leading to robust export performance in that sector.

Statistics Canada highlighted these factors as central to the monthly surplus, the first in six months.