When the price of a country’s biggest export is suddenly halved, resulting in thousands of layoffs in a key industry, you’d naturally expect consumers to rein in their spending.

But so far, at least, that hasn’t been the case in Canada, where oil is by far the No. 1 product sent abroad.

The latest evidence came Friday, when Statistics Canada (StatCan) released its retail sales report for March. It showed that our northern neighbor’s citizens spent a total of CAD42.5 billion during the month, up 0.7% from February and well above the 0.3% rise economists were looking for. The gain followed a 1.5% jump in February.

StatCan saw higher spending in seven of the 11 categories it covers, but Canadians seemed particularly interested in dressing up and entertaining: Increases were especially strong for clothing stores–shoe stores in particular, which saw a 6.4% rise–and beer, wine and liquor stores (up 4.7%).

Sellers of automobiles and car parts notched the biggest gain in dollar terms, with a 1.5% increase. In all, cars and the various pieces that go into them chip in about a quarter of all Canadian retail sales.

Even in Alberta, ground zero for the oil collapse, sales rose 1.1% from February–though they were down 1.7% from a year earlier, compared to a 3.1% year-over-year gain for the country as a whole.

The Canadian government’s stats keeper isn’t the only one watching the uptick: Last month, payment processor Moneris–which measures spending across 350,000 stores–said Canadian shoppers spent 5.8% more in the first quarter from a year earlier.

Low Loonie Soaks Up Fuel Savings

Even with the better-than-expected report, the oil shock isn’t finished working its way through the country’s economy, and the retail sector does still face challenges.

For one, Canadian retailers likely won’t see many additional sales resulting from consumer savings at the gas pump. The day before StatCan’s report was released, TD Bank put out figures showing that the average Canadian household will pocket CAD600 this year as a result of lower fuel prices.

But here’s the rub: The lower Canadian dollar will take “roughly all of these savings” out of shoppers’ pockets as retailers pass along the higher cost of imported goods, according to TD.

“We estimate that the Canadian dollar could contribute about 0.8 percentage points to inflation in 2015, accounting for 40% of the increase in consumer prices in the year,” TD economic analyst Admir Kolaj wrote in a note quoted by the CBC last week.

Looking ahead, the TD sees retail sales slowing from 4.6% year-over-year growth in 2014 to 2.9% this year before bouncing back to a “more normal” 3.6% in 2016.

Another factor to bear in mind is rising Canadian household debt, which hit a record 163.3% of disposable income in the fourth quarter of 2014.

The good news is that Canadians have a long history of successfully managing their obligations. According to data from the Canadian Bankers Association, mortgages account for about 70% of Canadians’ household debt, and just 0.29% of the nation’s home loans were in arrears as of February.

Mortgage defaults remain highly uncommon north of the border: You have to go all the way back to 1992 to find the last time the arrears rate strayed above 1%, according to CBA statistics.

On the consumer side, the association says that 60% of Canadians pay off their credit card balances every month, and delinquency rates remain low, at around 0.78%.

Change in Central Bank Policy ‘Unlikely’

In any case, the U.S. Federal Reserve, not the Bank of Canada (BoC), seems likely to be the first to raise interest rates, with the former expected to do so later this year as the U.S. economy strengthens.

Meanwhile, despite higher import prices stemming from the weak loonie, Canadian inflation continues to lag the BoC’s 1% to 3% target range. According to a separate report released by StatCan on Friday, April inflation rose 0.8% from a year earlier, down from 1.2% in March and marking the slowest increase since October 2013.

The core rate, which excludes items with volatile prices such as food and energy, rose 2.3% in April, compared to a 2.4% increase in March.

The inflation report is the final piece of data to come in before the central bank’s Wednesday policy meeting, where most economists expect it to leave its overnight lending rate at 0.75%. Canada’s first-quarter gross domestic product (GDP) numbers are due out on Friday.

The BoC, for its part, feels Canadian economic growth will pick up later this year as non-energy exports start to fill the gap left by crude and take some pressure off the country’s consumers. Right now, the bank envisions a 2% inflation rate and an economy running at full capacity by the end of 2016.

“Things are going according to the Bank of Canada’s plan,” National Bank Financial senior economist Krishen Rangasamy said in a May 22 Bloomberg article. “It’s very unlikely they will change their tone.”

Non-Energy Exports Show Signs of Life

There is some evidence that the sectors upon which the bank’s forecast relies are starting to firm up, helped by the low loonie and rising demand from the U.S.

Although Canada posted a record $3 billion trade deficit in March–largely due to falling oil–a number of non-energy sectors did see higher year-over-year exports, including automotive (up 12.9%) and forestry, building and packaging materials (up 25.0%).

For the full year, government agency Export Development Canada forecasts a 13% rise in automotive exports, along with a 7% gain for forestry, and a 14% jump in shipments of industrial gear.