Canadian trade numbers reached record highs in March, with exports up 6.3 percent to a record $63.6 billion, and imports rising by 7.7 percent to a new high of $61.1 billion.
Canada’s merchandise trade surplus narrowed from $3.1 billion in February to $2.5 billion in March.
The export record beat the previous high – set in February this year – by almost $4 billion. Exports of energy products rose by 12.8 percent to a record $17.9 billion in March. Energy accounted for 28.2 percent of total exports, an increase of almost 10 percentage points from the share of 18.3 percent observed in March 2021.
Imports of energy products posted significant gains in March, rising 26.3 percent. Higher imports of crude oil and bitumen (+39.9 percent) were primarily behind the increase, with prices and volumes rising markedly.
Exports to the United States continued to climb, with an increase of 7.7 percent in March. This was driven mainly by higher crude exports.
In contrast, imports edged up 5.4 percent, primarily because of higher imports of energy products and vehicle parts. As a result, Canada’s trade surplus with the United States widened from $10.9 billion in February to a record $12.6 billion in March.
War in Ukraine
According to Conference Board of Canada researcher Momanyi Mokaya, Russia’s invasion of Ukraine has shown up in trade numbers. Total trade (exports plus imports) with Russia was $2.8 billion in 2021, representing 0.2 percent of Canadian trade activity. Trade with Ukraine in 2021 was $447 million.
Mokaya said in an analysis that the direct impact of the trade sanctions imposed on Russia should be minimal for Canadian merchandise trade values. Still, demand for Canada’s exports has risen since Canada produces a lot of what Russia does (natural gas, grains, crude oil, metals, fertilizer, lumber etc.). Therefore, Canada’s export values are indirectly being affected by higher demand. Canada’s exports are also being impacted through higher prices which have jumped due to the conflict.
He also pointed out the continuing effects of the Covid-19 pandemic on supply chain operations. Due to the Chinese government’s zero-Covid stance, widespread mobility restrictions in major cities are weighing on household consumption and will further disrupt supply chains in the near term.
“With China’s unmatched role in global trade and as a key manufacturing hub, we are likely to feel some downstream effects on supply chains in the coming months,” Mokaya said. “Needless to say, supply chain disruptions are far from over.”