Canada’s trade balance returns to deficit as imports surge

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.

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