Canada recorded its first merchandise trade surplus in six months in March, buoyed by higher energy prices and a surge in gold exports, according to data released Tuesday by Statistics Canada. The country posted a trade surplus of approximately 1.78 billion Canadian dollars (around US$1.31 billion), reversing February’s deficit of C$5.11 billion. Analysts had expected a smaller deficit, making the surplus a surprising development.

The rise in exports was driven primarily by an 8.5% increase in the value of goods shipped abroad, reaching C$72.77 billion—the second-highest on record. Energy exports rose 15.6% to their highest level since September 2022, propelled by soaring crude oil prices amid geopolitical tensions in the Middle East. A military conflict involving the U.S. and Israel and Iran has effectively halted tanker shipments through the Strait of Hormuz, a critical oil transit route, causing crude oil prices to spike.

Metal and mineral exports climbed 24%, largely due to a 37.7% increase in shipments of unwrought gold and related metals, particularly to the United Kingdom. This supported a strong overall trade performance despite a modest 1.1% rise in exports excluding energy and metals. Imports declined by 1.6% to C$70.99 billion, with notable decreases in consumer goods and transportation equipment imports.

Canada’s trade relationship with the United States, its largest trading partner, showed significant improvement as the goods-trade surplus with the U.S. widened to C$7.07 billion, up from C$2.86 billion in February. This marked the largest surplus since May 2020. Meanwhile, the deficit with other trading partners narrowed to C$5.29 billion, the smallest since early 2021. Exports to countries outside the U.S. also rose 9.1%, reaching new highs for a second consecutive month, reflecting government efforts to diversify trade away from its traditional reliance on the U.S. market.

In volume terms, exports in March edged down 0.3% and imports fell 2%, indicating some moderation in physical goods traded despite the higher values. For the first quarter of 2026, Canadian exports increased 3.5% in value but decreased 0.6% in volume, while imports rose 4.6% by value and 3.3% in volume, supported by higher gold purchases.

Economists noted that while the trade data highlight Canada’s strengths as an energy supplier amid current Middle East disruptions, lingering uncertainties surrounding trade policies and tariffs remain a concern. Bank of Canada Governor Tiff Macklem recently underscored potential risks associated with a forthcoming U.S.-led review of the USMCA trade agreement, which could introduce new uncertainties in the summer months.

Overall, the March trade figures underscore resilience in Canada’s export sector, though analysts caution that tighter global trade conditions and inflationary pressures linked to higher energy costs may continue to weigh on economic growth.