In March, Canada’s merchandise exports posted a strong increase, rising 8.5%, while imports fell 1.6%. As a result, Canada’s merchandise trade balance with the world went from a deficit of $5.1 billion in February to a surplus of $1.8 billion in March. This is the first trade surplus since September 2025, reported Statistics Canada.
Following a 6.8% increase in February, total exports rose 8.5% to $72.8 billion in March, the highest level since January 2025. Amid the uncertainty surrounding the economic repercussions stemming from the conflict in Iran, some product sections saw sharp movements. In particular, exports of metal and non-metallic mineral products and of energy products posted the largest monthly increases. Excluding these two product sections, exports increased more moderately (+1.1%) in March. Overall, gains were observed in 7 of the 11 product sections. The increase in prices had a significant impact on the growth in exports in March; in real (or volume) terms, total exports edged down 0.3%, said the federal agency.
“Following a record high in February, total imports were down 1.6% in March. Overall, declines were observed in 8 of the 11 product sections. In real (or volume) terms, total imports fell 2.0%,” said Statistics Canada.
“Imports of consumer goods decreased 3.9% in March. Following a 14.4% increase in February, imports of pharmaceutical products (-9.3%) were the largest contributor to the monthly downturn. Declines were also observed in imports of clothing, footwear and accessories (-4.2%), other food products (-4.1%), miscellaneous goods and supplies (-2.7%) and meat products (-9.3%) in March.”
David-Alexandre Brassard
Global instability is reshaping Canada’s trade balance sharply, with a widening surplus driven by rising oil and commodity prices, said CPA Canada.
The war in Iran and ongoing disruptions in the Strait of Hormuz are improving Canada’s terms of trade and pushing export values higher.
“Higher oil and commodity prices are flowing directly into Canada’s export values, pushing our trade balance to its strongest position in more than a year,” said CPA Canada’s chief economist David-Alexandre Brassard.
“If these disruptions persist, we can expect stronger terms of trade and continued surpluses—or at least narrower deficits in the near term.”
The surge in commodity prices has also lifted exports to the U.S. to their highest levels since March 2025, before tariffs were introduced.
“Tariff pressures have eased in recent months as businesses adapt, but tougher U.S. measures expected this spring, particularly targeting metal manufacturing, could quickly change the trajectory of U.S. exports,” Brassard added.
The rebound in trade is also supporting broader economic growth, with goods-producing industries now driving much of Canada’s expansion in 2026—the reverse of last year.
Shelly Kaushik
The March trade figures highlight Canada’s relative advantage as an energy supplier while the Strait remains closed. While that support will remain until the Middle East conflict is resolved, the pace of global non-energy demand and the future of the USMCA remain key sources of uncertainty, said Shelly Kaushik, Senior Economist, BMO Capital Markets.
Andrew Grantham
Andrew Grantham, Senior Economist, CIBC Capital Markets, said: “A surge in gold and oil exports, led by higher prices, saw Canada’s trade balance flip unexpectedly to a surplus in March. The $1.8bn goods trade surplus compared to a $5.1bn deficit in the prior month and consensus expectations for a $2.5bn shortfall. Total exports surged by 8.5%, driven almost exclusively by metals and energy. Excluding those two areas, exports were up by a much more modest 1.1%. Higher prices drove most of the surge in nominal exports, as in volume terms overall exports were not as strong. In contrast to the strength in exports, imports fell on the month led by consumer goods. Overall, today’s data confirm that higher global energy prices are helping Canada’s nominal trade position, but not yet leading to much improvement in the volume of economic activity.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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