Canada Current Account Deficit Widens In Q1


Canada's current account gap increased by CAD 2.3 billion to CAD 14.1 billion in first quarter of 2017 from an upwardly revised CAD 11.8 billion in the previous period, and worse than market expectations of a CAD 12 billion deficit. The goods balance shifted to a deficit from a surplus due to higher imports of energy products and motor vehicles and parts.

The goods balance posted a CAD 1.8 billion deficit, following a CAD 0.1 billion surplus. Total exports of goods rose CAD 2.2 billion to CAD 138.5 billion. Energy products, led by crude petroleum, were the major contributor, with exports up CAD 2.5 billion as prices reached their highest level since the end of 2014. Total imports of goods were up CAD 4.0 billion to CAD 140.3 billion, as both energy products and motor vehicles and parts had increases of more than CAD 1 billion.

On a geographical basis, the goods surplus with the United States, led by stronger exports of energy products, increased CAD 0.5 billion in the first quarter. Meanwhile, the deficit with non-US countries increased CAD 2.3 billion, mainly reflecting higher deficits with Brazil, Netherlands, Germany and Hong Kong. 

The services deficit rose CAD 0.3 billion to CAD 5.7 billion, as the commercial services surplus went down. Imports of commercial services edged up CAD 0.2 billion while exports were unchanged. The deficit on transport services increased slightly, reflecting higher payments of water transport. Travel deficit also marginally increased to reach CAD 3.7 billion, as higher receipts from US travellers were more than offset by larger payments by Canadian travellers visiting the United States.

The investment income deficit, the difference between incomes generated on Canada's international assets and liabilities, went up CAD 0.2 billion to  CAD 5.4 billion in the first quarter. Higher interest paid on foreign currency deposits held by non-residents in Canada contributed to the increase in the investment income deficit for the quarter. Profits by foreign direct investors on their Canadian assets were unchanged. On the receipt side, profits earned by Canadian direct investors on their assets abroad were up $0.3 billion despite lower dividend receipts. This increase was moderated by lower interest receipts on inter-company debt claims. 

Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com
5/30/2017 1:13:28 PM