Canada Current Account1946-2021 Data | 2022-2023 Forecast | Calendar | Historical

Canada's posted a CAD 1.2 billion current account surplus in the first quarter after recording a CAD 5.3 billion deficit in the fourth quarter of 2020. This was the first surplus since the third quarter of 2008, mostly reflecting the first positive trade in goods and services balance since 2008, which was partially offset by a lower investment income surplus. The goods balance posted a slight surplus, while the services balance remained in an unusual surplus position in the context of the COVID-19 pandemic. In comparison, the last surplus, observed in the third quarter of 2008, reflected a much stronger goods surplus, moderated by a services deficit to which travel services were the main contributor.

Canada's current account deficit narrowed by CAD 3.2 billion to CAD 7.3 billion in the fourth quarter of 2020, compared to market forecasts of CAD 8.3 billion. This reduction reflected a higher investment income surplus and, to a lesser extent, a lower trade in goods and services deficit. Investment income receipts were up after three consecutive quarterly reductions, while payments were down for the fourth quarter in a row. The investment income surplus rose by CAD 3 billion to CAD 4.2 billion, almost entirely as a result of higher profits earned by Canadian direct investors abroad, as direct investment profits earned by foreigners in Canada edged up slightly. At the same time, the deficit in trade in goods and services dropped by CAD 421 million to CAD 9.2 billion, driven by a lower trade in goods deficit and a higher trade in services surplus. Considering full 2020, the current account deficit dropped by CAD 4.7 billion to CAD 42.7 billion.

The current account deficit in Canada widened to CAD 7.5 billion in the third quarter of 2020 from a downwardly revised CAD 7 billion in the previous period but came much smaller than market forecasts of a CAD 9.1 billion gap. A larger deficit in trade in goods and services was moderated by a higher investment income surplus in the quarter. Overall, both exports and imports of goods increased significantly in the third quarter but were still below pre-pandemic levels. Goods imports were up by a record CAD 30.0 billion to CAD 144.9 billion, mainly due to motor vehicles and parts. International travel services remained considerably low as travel restrictions continued to be in force. Also, the primary income surplus increased by CAD 0.4 billion to CAD 1.7 billion due to a higher investment income surplus.

Canada's current account deficit narrowed to CAD 8.6 billion in the second quarter of 2020 from an upwardly revised CAD 13.2 billion in the prior period and compared with market consensus of a CAD 12.2 billion shortfall. The goods and services gap decreased by CAD 5.3 billion to CAD 7.9 billion, as the goods deficit fell by CAD 1 billion to CAD 7.7 billion as exports fell by an unprecedented CAD 33.2 billion to CAD 106.9 billion and imports were down by a record CAD 34.2 billion to CAD 114.5 billion. The services shortfall dropped to CAD 0.2 billion from CAD 4.5 billion in Q1, mainly due to the slower activity in the tourism sector, resulting from the COVID-19 pandemic and related travel restrictions in force, which reduced the number of cross-border travellers. In addition, the secondary income deficit narrowed to CAD 1 billion from CAD 1.2 billion. Meanwhile, the primary income surplus went down by CAD 0.9 billion to CAD 0.2 billion, mostly due to a lower investment income surplus.