Statistics Canada released the trade data on Tuesday. Canada's trade deficit widened to C$3.02 billion in March from a deficit of C$2.2 billion in February. It was the largest deficit since July 2012.
February's figure was revised down from a deficit of C$0.98 billion.
Analysts had expected a trade deficit of C$0.8 billion.
The larger deficit was driven by higher imports and lower oil prices.
Exports were up 0.4% in March. Exports of energy products dropped by 8.9%.
Imports rose 2.2% in March. Imports of motor vehicles and parts climbed by 3.7%, while imports of consumer goods rose 7.9%.