Statistics Canada reports $506M merchandise trade deficit for March

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OTTAWA — Canada posted a merchandise trade deficit of $506 million in March as exports to the U.S. fell with the implementation of new tariffs, but shipments to other countries climbed.

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Statistics Canada says the result compared with a deficit of $1.4 billion in February.

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Stephen Brown, deputy chief North America economist at Capital Economics, said tariffs took a bite but strong demand elsewhere softened the blow.

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“The surprise improvement in Canada’s goods trade balance in March, despite the imposition of U.S. tariffs, was thanks to a surge in exports to other countries,” Brown wrote in a report.

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“Nonetheless, as the survey indicators of export orders have plunged in recent months, it seems unlikely that exports will hold up for much longer.”

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BMO senior economist Shelly Kaushik said March was the first month of tariffs after months of threats and delays, adding that the April figures will be the first to include auto tariffs.

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“Looking beyond the monthly swings, we expect trade will drag on growth starting in Q2 through the rest of the year,” Kaushik said.

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Overall exports edged down 0.2 per cent to $69.9 billion in March as exports to the U.S. fell 6.6 per cent, but exports to countries other than the U.S. rose 24.8 per cent.

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Exports of consumer goods fell 4.2 per cent as exports of meat products dropped 10.8 per cent in March, while pharmaceutical products lost 7.0 per cent.

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The energy products group fell 2.2 per cent as exports of nuclear fuel and other energy products dropped 54.5 per cent, mainly because of lower shipments of uranium to the Netherlands and the U.S.

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Meanwhile, imports fell 1.5 per cent to $70.4 billion as imports of metal and non-metallic mineral products dropped 15.8 per cent and energy products lost 18.8 per cent.

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Canada’s merchandise trade surplus with the U.S. was $8.4 billion in March compared with $10.8 billion in February, while the country’s trade deficit with countries other than the U.S. was $9 billion in March compared with $12.2 billion in February.

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In volume terms, total exports rose 1.8 per cent in March, while imports ticked down 0.1 per cent.

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In a separate report, Statistics Canada said the country’s international trade in services deficit narrowed $400 million in March compared with $600 million in February as imports of services fell 0.9 per cent to $18.1 billion and exports of services edged up 0.3 per cent to $17.7 billion.

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Canada’s total trade deficit with the world, including goods and services, was $942 million in March compared with $2.1 billion in February.

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This report by The Canadian Press was first published May 6, 2025.

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