Exports fell 0.7%, weighed by a ninth straight drop in energy products (-5.9%) as both prices and volumes for crude oil exports declined. Farm, fishing, and intermediate products decreased 5.3% but remain at elevated levels as agricultural production recovers from last year’s drought conditions. Partially offsetting the declines was a 30.8% increase in exports of aircraft and other transportation equipment and parts, boosted by exports of business jets to the United States. Meantime, imports decreased 2.9%, weighed by consumer goods (-11.0%) as pharmaceutical products retraced February’s gain.

On a volume basis, exports edged up 0.7% while imports fell 4.3%. For the quarter, exports rose 13.8% a.r. and imports declined 1.5% a.r., suggesting that trade will add strongly to Q1 growth.

In a separate release, the services trade deficit narrowed slightly to $1.96 bln in March from $1.98 bln in February. Altogether, that means Canada’s overall trade deficit narrowed from $2.5 bln to $1.0 bln in the month.

Key Takeaway: Canada’s merchandise trade surplus returned to surplus in March, following a revised modest deficit in February. However, the improvement came from declines in both exports and imports in the month. That said, real trade flows point to a solid boost to growth for the first quarter.

Table 1 - Canada — Merchandise Trade

(C$ billions)

Source: BMO Economics, Haver Analytics

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