Canada’s merchandise export balance swung to a $1.8 billion surplus in March after a $5.1 billion deficit in February. Crude oil and gold did the heavy lifting. For exporters, that meant a month of much stronger pricing power even as trade volumes were still working through tariff pressure.
Crude Oil and Gold Lift March
18.9% was the jump in crude oil exports from February, while unwrought gold and silver exports rose 38% in March. Those two moves were the clearest drivers behind the surplus and helped offset a trade backdrop that had been negative just one month earlier.
March was the first full month of a new tariff regime imposed by the U.S. administration after the U.S. Supreme Court ruled against IEEPA tariffs in February. Canadian exports meeting CUSMA criteria were already largely exempt from IEEPA tariffs, which limited the direct tariff hit on some shipments even as the broader export mix was still under pressure.
Q1 Volumes Stayed Soft
2.4% was the annualized decline in exports excluding price impacts in Q1 as a whole. Steel exports were still running 50% below year-ago levels, and lumber exports were 22% lower than a year earlier, showing that not every sector participated in the March rebound.
14% was the rise in imports excluding price impacts in Q1, while imports fell 1.6% in March and were down 2.5% excluding price impacts for the month. Industrial equipment and imports increased at a 17% annualized rate in Q1, keeping demand for foreign goods firm even as the trade balance improved.
Energy Prices Changed the Math
4 percentage points was the subtraction from Q1 GDP growth that net trade was tracking, a drag that kept the March surplus from looking like a clean turnaround. The conflict in the Middle East raised oil prices and increased net energy exports, giving Canada a stronger month on paper without erasing the softer underlying export tone in steel, lumber and overall volumes.
March left exporters with a clearer split: commodity-linked shipments improved fast, while broader trade volumes stayed mixed. If oil prices hold and gold shipments stay elevated, the March surplus can carry further into the second quarter; if they fade, the February-style deficit can return just as quickly.
