Canada Current Account Deficit Narrows in Q3

Canada's current account balance swung to a surplus of C$8.8 billion in the second quarter of 2026 from a deficit of C$8.3 billion in the prior quarter, marking the first surplus since the second quarter of 2022 and the largest since the last quarter of 2005. The result also missed expectations for a C$2 billion shortfall. Strong gains in goods exports, led by energy products, moved the trade in goods balance from a deficit to a large surplus of C$12.2 billion, being the main contributor in the shift. Imports of goods increased as well, but at a slower pace than exports. By contrast, the services surplus declined sharply to C$26 million, while the primary income deficit widened to C$2.6 billion reflecting higher interest on debt securities. The secondary income deficit also widened sharply to C$782 million, driven by higher private transfers and lower government transfers.

Canada's current account deficit widened by C$6.2 billion to C$7.2 billion in the first quarter of 2026, missing forecasts of a C$4.7 billion gap and marking the 15th consecutive quarterly deficit. The investment income surplus narrowed by C$4.9 billion to C$2.5 billion, mainly due to lower direct investment income. Meanwhile, the trade deficit in goods widened by C$3.3 billion to C$7.7 billion as imports rose faster than exports. Goods imports increased 5.5% to a record C$211 billion, driven primarily by a 38.3% surge in metal and non-metallic mineral products, largely gold, amid sharply higher precious metal prices. In contrast, Canada’s trade surplus in services increased by C$0.8 billion to C$1.3 billion.

Canada’s current account deficit narrowed by C$11.9 billion to C$9.7 billion in Q3 2025. The goods and services deficit fell from C$19.1 billion in Q2 to C$10.6 billion. Goods exports rose 1.8% to C$186.0 billion after a 12.6% drop in the previous quarter, while goods imports fell 2.0% to C$197.1 billion, marking a second straight decline. The services balance moved from a C$0.7 billion deficit to a C$0.5 billion surplus, supported by a larger commercial services surplus and a smaller transportation deficit. The investment income surplus widened by C$2.9 billion to C$7.0 billion amid higher direct investment income.