According to Statistics Canada, Canada’s imports posted a significant increase of 5.5 percent in March, while exports edged up 0.3 percent. As a result, following two consecutive monthly trade surpluses, Canada’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.
Total imports rose 5.5 percent in March to $51.8 billion, the highest level observed since May 2019. All 11 product sections posted increases, with 9 up more than $100 million. Year over year, the value of imports rose 6.3 percent compared with March 2020, when pandemic restrictions began to have a significant impact on Canada’s trade activity. In real (or volume) terms, total imports increased 7.0 percent in March.
Total exports edged up 0.3 percent in March to $50.6 billion, and were 14.4 percent higher than in March 2020. Exports of non-energy products rose 2.0 percent to $41.2 billion, the third highest level on record. In real (or volume) terms, total exports were down 0.3 percent.
Following a 25.0 percent decrease in February, exports of metal ores and non-metallic minerals were up 33.0 percent in March, essentially offsetting the decline in the previous month. Exports of iron ores, which were the main contributor to the February drop, rose 57.7 percent in March. Iron ore exports were up 80.7 percent compared with March 2020, coinciding with strong global demand for this metal ore and higher prices.
Following an 11.5 percent decline in February, exports to countries other than the United States rose 12.6 percent in March, the largest percentage increase in four years. Exports to Hong Kong (refined gold), the Netherlands (crude oil) and South Korea (metal ores and refined gold) contributed the most to the increase.
Imports from countries other than the United States rose 5.9 percent in March, mainly on a sharp increase in imports from China (+27.1 percent). Imports of electronics, furniture and appliances, among others, contributed to the widespread growth in imports from China in March.
As a result, 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 the United States fell 3.8 percent in March, while imports rose 5.2 percent. 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.