Record high imports helped push Canada’s trade deficit to a record for March as it grew to $4.1 billion, Statistics Canada said Thursday.
However, despite the shortfall, economists noted that exports also rose, though not as quickly.
“Today’s trade release was expected to be a ho-hum affair, but a surge in two-way trade completely changed that story,” Canadian Imperial Bank of Commerce economist Royce Mendes wrote in a report.
“Canada’s deficit now stands at a record level on the back of what appears to be strengthening domestic demand.”
Canadian imports climbed 6% to $51.7 billion in March due to the motor vehicles and parts sector as well as consumer goods.
Imports of motor vehicles and parts rose 8.3% to $10.3 billion, the strongest increase since 2011, while consumer goods climbed 7.7% to a record $11.0 billion.
Meanwhile, exports increased 3.7% to $47.6 billion, boosted by the aircraft and other transportation equipment and parts sector as well as farm, fishing and intermediate food products and energy products.
Exports of aircraft and other transportation equipment and parts rose 24.3% in March to $2.3 billion, while farm, fishing and intermediate food products increased 14.7% to $2.8 billion.
Exports excluding energy products rose 3.6%.
In volume terms, imports rose 5.3% and exports grew 3%.
Regionally, Canada’s trade surplus with the United States narrowed for the fifth consecutive month to $1.7 billion in March compared with $2.3 billion in February.
Imports from the U.S. rose 3.1% in March due in large part to higher imports of passenger cars and light trucks, while exports to the U.S. rose 1.2%, led primarily by higher exports of crude oil.
Canada’s trade deficit with countries other than the United States increased to $5.8 billion in March from $5.2 billion in February.