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Canada's balance of international payments, first quarter 2019

Released: 2019-05-30

Current account balance

-$17.3 billion

First quarter 2019

Canada's current account deficit (on a seasonally adjusted basis) widened by $0.7 billion in the first quarter to $17.3 billion, reflecting a higher trade in goods and services deficit, and moderated by a lower investment income deficit.

The deficit on trade in goods and services rose by $1.2 billion. Exports were up $2.3 billion to $177.1 billion, mainly on higher sales of energy products. Imports of goods and services increased by $3.6 billion to $192.3 billion, led by higher imports of aircraft and passenger cars and light trucks. The deficit on investment income decreased by $0.2 billion to $1.2 billion. Revenues earned by foreign direct investors on their Canadian assets were down in the quarter.

Inflows of funds from abroad to finance the current account deficit mainly came from transactions in securities in the first quarter. Non-residents significantly increased their holdings of Canadian private corporate securities. Meanwhile, Canadian investors considerably reduced their exposure to foreign shares.

Direct investment abroad exceeded direct investment in Canada by the highest value in two years, resulting in a net outflow of funds totalling $18.7 billion. Direct investment abroad rebounded in the first quarter, following lower activity in the fourth quarter. Meanwhile, direct investment in Canada slowed on lower mergers and acquisitions activity.

Chart 1  Chart 1: Current account balances
Current account balances

Current account

The goods deficit continues to expand in the first quarter

The trade in goods deficit expanded by $1.2 billion to $9.1 billion in the first quarter, as imports rose by more than exports. This followed a $6.7 billion increase in the deficit in the fourth quarter.

Exports of goods were up by $2.0 billion to $146.0 billion in the first quarter. Partly recovering from a large decline in the previous quarter, exports of energy products rose $3.5 billion in the first quarter—entirely on higher crude petroleum prices (+29%). This was partly offset by lower exports of farm, fishing and intermediate food products, notably canola and other crop products.

Imports of goods were up by $3.2 billion to $155.2 billion in the first quarter. Aircraft and other transportation equipment and parts rose to $2.0 billion on stronger imports of aircraft. Motor vehicles and parts rose $1.3 billion while pharmaceutical and medical products accounted for most of the $0.7 billion increase in imports of consumer goods.

On a country basis, the trade deficit with China increased by $2.1 billion to $6.1 billion, mainly on lower exports of farm, fishing and intermediate food products. The trade surplus with the United States was up by $2.4 billion, led by higher exports of energy products.

Chart 2  Chart 2: Goods balances by geographic area
Goods balances by geographic area

The trade in services deficit remained at $6.0 billion in the first quarter. A larger travel deficit was offset primarily by a higher commercial services surplus.

Lower deficit on investment income

The deficit on investment income decreased by $0.2 billion to $1.2 billion in the first quarter.

Since 2014, the growth in investment income receipt has generally outpaced that of payments. From $6.5 billion in the first quarter of 2014, the deficit stood at $1.2 billion in the first quarter of 2019. Profits earned on direct investment abroad were mostly responsible for the lower deficit since 2014. Canadian direct investment abroad largely exceeded foreign direct investment in Canada over this period.

Financial account

Foreign investment in Canadian securities resumes

Foreign investors increased their holdings of Canadian securities by $39.9 billion in the first quarter, following a divestment of $6.0 billion in the previous quarter. The investment activity was largely in Canadian corporate securities.

Foreign investment in Canadian bonds resumed in the first quarter, reaching $26.3 billion. Foreign acquisitions of corporate bonds, mainly instruments denominated in foreign currencies, accounted for most of the investment. Foreign investors also increased their exposure to government bonds for the first time in five quarters.

Foreign holdings of Canadian shares were up by $15.0 billion, the largest investment in two years. Issuances of new Canadian shares resulting from cross-border mergers and acquisitions accounted for the bulk of the activity. Canadian stock prices were up by 12.4% and the Canadian dollar appreciated by 1.5 US cents against the US dollar in the quarter.

Chart 3  Chart 3: Foreign investment in Canadian securities
Foreign investment in Canadian securities

On the other side of the ledger, Canadian investors sold $929 million of foreign securities in the first quarter, the first divestment in three years. They continued to invest in foreign debt securities, largely US corporate instruments, but reduced their holdings of equities during the quarter. Investors sold $13.3 billion of US shares, a fourth consecutive quarterly divestment.

Direct investment abroad increases significantly

Direct investment abroad totalled $30.9 billion in the first quarter, up from $12.7 billion in the fourth quarter. The investment was entirely in the form of equity instruments. Mergers and acquisitions activity totalled $16.9 billion and mainly involved non-US firms. On a sector basis, approximately half of the overall direct investment abroad was in the energy and mining industry.

Direct investment in Canada was $12.2 billion in the first quarter. Just over half of the investment activity was in the manufacturing industry. Equity investments made by foreign parents in Canadian affiliates accounted for almost two thirds of the overall investment activity. Mergers and acquisitions activity was slow in the quarter.

Chart 4  Chart 4: Foreign direct investment
Foreign direct investment

  Note to readers


The balance of international payments covers all economic transactions between Canadian residents and non-residents in three accounts: the current account, the capital account and the financial account.

The current account covers transactions in goods, services, compensation of employees, investment income and secondary income (current transfers).

The current account data in this release are seasonally adjusted. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

The capital account covers capital transfers and transactions in non-produced, non-financial assets.

The financial account covers transactions in financial assets and liabilities.

In principle, a net lending (+) / net borrowing (-) derived from the sum of the current and capital accounts corresponds to a net lending (+) / net borrowing (-) derived from the financial account. In practice, as data are compiled from multiple sources, this is rarely the case and gives rise to measurement error. The discrepancy (net errors and omissions) is the unobserved net inflow or outflow.

Foreign direct investment is presented on an asset-liability principle basis (that is, gross basis) in the financial account. Foreign direct investment can also be presented on a directional principle basis (that is, net basis), as shown in supplementary foreign direct investment tables 36-10-0025-01, 36-10-0026-01, and 36-10-0473-01. The difference between the two foreign direct investment conceptual presentations resides in the classification of reverse investment such as (1) Canadian affiliates' claims on foreign parents and (2) Canadian parents' liabilities to foreign affiliates. Under the asset/liability presentation, (1) is classified as an asset and included in direct investment assets, also referred to as direct investment abroad in this text, and (2) is classified as a liability and included in direct investment liability, also referred to as direct investment in Canada in this text.

For more information on the balance of payments, consult chapter 8, "International accounts," in the User Guide: Canadian System of Macroeconomic Accounts, available on our website. The chapter also presents the most recent balance of payments statistics.

Real-time table

Real-time table 36-10-0042-01 will be updated on June 10. For more information, see Real-time tables.

Next release

Balance of international payments data for the second quarter will be released on August 29.


The product Canada and the World Statistics Hub (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China and Japan.

The document, "A preview of the 2019 revision of the Canadian System of Macroeconomic Accounts," which is part of Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X), is now available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300;

To enquire about the concepts, methods or data quality of this release, contact Denis Caron (613-808-2278;, International Accounts and Trade Division.

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