Canada Posts Largest Trade Deficit on Record

Canada's merchandise trade deficit widened to a record CAD 4.1 billion in March of 2018 from an upwardly revised CAD 2.9 billion in February and above market expectations of a CAD 2.24 billion gap. Imports advanced 6 percent, mostly due to higher purchases of motor vehicles & parts and consumer goods. Exports rose at a softer 3.7 percent, boosted by higher sales of aircraft & transportation equipment; farm, fishing & intermediate food products and energy products.
Statistics Canada | Gabriela Costa | 5/3/2018 1:51:51 PM
Total imports increased 6 percent month-over-month to a record high CAD 5.17 billion in March, after a 1.9 percent gain in the previous month. The biggest contribution was given by imports of motor vehicles & parts, which rose 8.3 percent to CAD 10.3 billion, the strongest increase since 2011, mostly due to higher purchases of passenger cars & light trucks. Additionally, imports increased for consumer goods (+7.7 percent to a record of CAD 11 billion); clothing, footwear & accessories (+20.8 percent) and pharmaceutical & medicinal products (+13.2 percent), particularly from the United States and Belgium.

Imports from the United States increased 3.1 percent in March, easing from a 3.8 percent gain in the previous month. Imports from China (+26.6 percent) led the increase, mainly on higher purchases of computers & computer peripheral equipment and of communications & audio and video equipment. Other notable increases were in imports from the Netherlands (motor gasoline) and Germany (passenger cars & light trucks).

Exports rose 3.7 percent in March to CAD 47.6 billion. Sales rose sharply for aircraft & other transportation equipment (+24.3 percent to CAD 2.3 billion), as exports of boats & other personal transportation equipment almost tripled, mainly due to higher exports of other transportation equipment to Saudi Arabia. Also, sales increased for aircraft engines & aircraft parts (+15.2 percent), primarily on higher shipments to the United States. Additionally, exports of farm, fishing & intermediate food products went up 14.7 percent to CAD2.8 billion and wheat exports (+51.9 percent) rebounded, following a sharp decline in February, which coincided with rail transportation disruptions in Western Canada.

Exports to the United States rose 1.2%, led primarily by higher exports of crude oil. Exports to countries other than the United States increased mainly from the United Kingdom (unwrought gold), Saudi Arabia (other transportation equipment), South Korea (aircraft) and Japan (copper and coal).

For the first quarter of 2018, Canada's trade gap widened 23 percent quarter-on-quarter to CAD 9.1 billion, as imports rose 2.1 percent to CAD 148.3 billion and exports went up at a softer pace of 1 percent to CAD 139.2 billion.

Canada Posts Largest Trade Deficit on Record