MNI DATA REACT: Canada March Trade Bal -$1.4B Vs Expected -$2B

By Greg Quinn

     OTTAWA (MNI) - Canada's trade deficit was a smaller-than-expected CAD1.4

billion in March, though exports and imports tumbled as the Covid-19 pandemic

led to border controls and business shutdowns that are likely to be much tougher

in April.

     Exports fell 4.7% to CAD46.3 billion while imports were down 3.5% to

CAD47.7 billion, the lowest since October 2017. Economists surveyed by MNI

predicted the overall deficit would be CAD2 billion. 

     "With a full month of physical distancing policies in place in April,

merchandise trade values are expected to decrease more severely next month,"

Statistics Canada said Tuesday from Ottawa.

     Prime Minister Justin Trudeau barred overseas travelers on March 16 and

soon after took the historic step of closing the U.S. border to all but

shipments of essential goods. Canada is one of the most trade reliant nations in

the G7, with two-way trade equal to 66% of its GDP in 2018, and three-quarters

of its exports went to the U.S.

     Imports and exports were both about 10% lower in March than the same month

a year ago, another signal that Canada's economy was stumbling even before

Covid-19 spread and may need more time than other nations to rebound.

     Automobile exports dropped 9.8% in March as major assembly lines halted

production or shifted to making medical gear, reductions that remain in place

today, StatsCan said. Exports of boats and other transport gear dropped 63% to

CAD98 million, and aircraft shipments will likely dry up in coming months.   

     Energy exports fell 7.4% in March, the third straight decline, and may

plunge as the drop in global prices is written into new contracts.

     The trade deficit was curbed as the end of railway blockades restored grain

shipments that boosted the food export category by 12% in March.  

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

[TOPICS: MACDS$,M$C$$$,MI$$$$]