Statistics Canada reported that Canada’s economy swung from a trade deficit to surplus over the month of March. This marked Canada’s first trade surplus since September 2025, benefiting from a sharp increase in exports, while imports moved lower. Trade is a critical part of Canada’s economy, particularly given the country’s relatively low population. And the spotlight on trade has grown since the US imposed tariffs on key sectors of Canada’s economy, which makes the review of the Canada-United States-Mexico Agreement (CUSMA) vital to the outlook for Canada’s economy.

• Canada’s economy had a trade surplus of $1.78 billion in March, rebounding from the $5.11 billion trade deficit in the previous month. Based on a Bloomberg survey, economists were expecting a trade deficit of $2.50 billion.
• Exports rose by 8.5% in March to $72.8 billion, the second-highest amount ever behind January 2025. Energy exports rose markedly, due in part to higher oil prices. Exports of metal products also increased sharply over the month.
• Conversely, imports inched lower by 1.6% to $70.99 billion. There was a decline in purchases of foreign consumer goods, particularly for health care products, clothing and meat products.
• Despite the decline, March saw the second-highest level of imports ever, right behind the previous month.
• South of the border, the US trade deficit widened to US$60.3 billion from US$57.8 billion. Imports rose at a slightly faster pace than exports in March.

Canada remains at the table talking trade and CUSMA with the US, along with Mexico. Through all the trade uncertainty, the Canadian government continues to seek opportunities to diversify Canada’s economy and trade. Bank of Canada Governor Tiff Macklem recently said that he was encouraged by those efforts and that they should benefit Canada’s economy.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.