Trade Balance Update (Canadian International Merchandise Trade) March 2019

What were the results of today’s trade balance update from Statistics Canada, and what industries are most affected?

Canada’s trade deficit for March, 2019 was $3.2 billion, a narrowing of February’s $3.4 billion deficit. Both total exports and imports were up, with exports rising 3.2% to $49 billion, while imports were up 2.5% to $52.3 billion. It was the third straight month of improvement, and a continuation of the slow recovery from December 2018’s record setting $4.82 billion shortfall.(1)

Exports were led by energy exports, up 2.1% after a steep 4.2% drop in February, and motor vehicle and parts, up 5.6% after a 3.4 drop in the previous month. Meanwhile, imports increased in 8 of 11 sections, including strong rises in consumer goods and motor vehicle parts. Imports of aircrafts fell 50.7% after two months of strong gains.

Exports to countries other than the US rose 8.8%, after having decreased 13.9% in February. Higher exports to the UK, Netherlands, Germany and Saudi Arabia more than offset lower exports to Hong Kong.

Nathan Janzen, senior economist at the Royal Bank of Canada, is optimistic,

“Details were arguably a little better than that headline itself would imply,” he says, noting the breadth of sectors involved in the bounce-back, adding “The data will do nothing to change the Bank of Canada’s view that further interest rate hikes are not needed at the moment.”

What industries saw the biggest shifts in the March Trade Balance announcement today?

  • “Canada’s trade deficit with countries other than the United States widened from $6.4 billion in February to a record $6.8 billion in March.”
  • “Canada’s trade surplus with the United States widened from $3.0 billion in February to $3.6 billion in March” (1)

Mining, Oil & Gas: energy exports were up, “3.2% to $49.0 billion in March, with increases in 9 of 11 product sections”(1) Leading industrial categories were energy products and vehicle parts. Energy overall saw exports grow by an impressive 7.7% while crude oil specifically, after declining November to February due to lower Alberta production, rebounded 3.1% in March. Coal, natural gas and refined petroleum products all grew. Gold was the factor in higher exports to the United Kingdom while aluminum and crude oil exports to the Netherlands also grew, although Stats Canada is reporting this was offset due to lower gold exports to Hong Kong.

Manufacturing and Consumer Goods: Motor vehicles exports grew “following declines in three of the past four months, exports of motor vehicles and parts were up 5.6% in March, mostly on higher exports of passenger cars and light trucks (+8.4%).”(1) Traditional consumer goods also saw significant import growth with clothing, footwear and accessories increasing 22.9% from Bangladesh and Cambodia. The aircraft industry showed strain with aircraft deliveries from the United States falling 50.7%.

How does the trade balance work, and what does it affect?

Canada’s Trade Balance refers to the total value of our exports, less the total value of our imports. A negative balance indicates that we are purchasing more from the rest of the world than they are purchasing from us. This, in turn, will typically drive down the value of Canadian currency, which must be purchased to facilitate goods or services to be exported from Canada, and vice versa. A net negative balance of trade results in a net negative demand on Canadian currency.

(1) Statistics Canada,

Author Profile Picture

Henry Goldbeck

Henry E. Goldbeck, President of Goldbeck Recruiting Inc, is a Certified Personnel Consultant (CPC) and founded Goldbeck Recruiting in 1997. Since then, Henry has built the company's reputation as a leading headhunter and recruitment agency in sales, marketing, operations, engineering, and executive level positions across a variety of industries.

President & CEO at Goldbeck Recruiting Inc.