Canada swings to trade surplus in March as crude prices, gold exports jump

By Promit Mukherjee

OTTAWA, May 5 (Reuters) – Canada’s merchandise trade balance swung to a surplus in March, globally and with the United States, as higher crude oil prices and strong demand for gold drove a jump in exports while imports fell, data showed on Tuesday. 

Statistics Canada said the country posted a C$1.78 billion ($1.31 billion) surplus in March, compared with a C$5.11 billion deficit the month before.

It was the first surplus in six months as the war in Iran boosted crude oil prices and lifted the value of exports. While gold prices fell, global demand for the precious metal helped boost exports further.

Analysts polled by Reuters had forecast a deficit of C$2.88 billion.

Total exports rose 8.5% to C$72.8 billion, aided by a 24% increase in the metal and non-metallic product export category to a record high and a 15.6% increase in energy exports, which scaled its highest level since September 2022, StatsCan said. 

Excluding these two categories, Canada’s exports posted a modest 1.1% increase in value terms and slipped 0.3% in volume terms. 

Following a 24.9% increase in February, exports of motor vehicles and parts rose 4.5% in March, the statistics agency said.

“Energy is a price story, gold is a volume story,” said Prince Owusu, a senior economist with Export Development Canada. He said gold volumes helped Canada maintain market share it gained in non-U.S. market since tariffs began.

U.S. SURPLUS

Higher crude oil prices and increased shipments of passenger cars and light trucks drove Canada’s exports to the U.S. by 8.3% to C$48.51 billion in March, its highest level in a year. Imports from the U.S. dropped by 1.2% to C$41.44 billion.

Canada’s trade surplus with the U.S. reached its highest in six months at C$7.1 billion and its share of exports to the U.S. dropped to 66.7%, the lowest ever. 

Owusu said that although exports to the U.S. have started to rise, government efforts to diversify trade as well as strong demand for resources could boost shipments to other markets in the coming months.

U.S. President Donald Trump has slapped a range of tariffs on Canada as he has tried to shrink his country’s trade deficit with its neighbor. 

Exports to countries other than the U.S. hit yet another record high in March. Shipments to non-U.S. countries rose 9.1% in March while imports from countries other than the United States fell 2.2% in March, data showed.

The Canadian dollar rose 0.03% to 1.3620 after the trade data. Money markets are pricing in two 25 basis-point interest rate cuts by the Bank of Canada by the end of the year. <0#CADIRPR

(Reporting by Promit Mukherjee; Editing by Dale Smith, Louise Heavens and Hugh Lawson)