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Canada's balance of international payments, second quarter 2022

Released: 2022-08-30

Current account balance

$2.7 billion

Second quarter 2022

Canada's current account surplus (on a seasonal adjusted basis) amounted to $2.7 billion in the second quarter, a level similar to the surplus recorded in the first quarter. This balance reflected a higher trade in goods surplus offset by higher trade in services and investment income deficits.

In the financial account (unadjusted for seasonal variation), portfolio and direct investment both led the net lending activity to non-residents in the second quarter. Canadian acquisitions of foreign securities resumed, while foreign investors reduced their holdings of Canadian shares and government debt securities. Foreign direct investment generated a net outflow of funds as direct investment abroad exceeded direct investment in Canada.

As in the first quarter, overall cross-border activity in the second quarter occurred against the backdrop of rising interest rates and commodity prices. In addition, global equity markets sharply declined and the Canadian dollar appreciated against major foreign currencies, except the US dollar.

Current account

The trade in goods and services surplus increases

The trade in goods and services balance posted a $9.1 billion surplus in the second quarter, a level not reached since the third quarter of 2008. The trade in goods surplus reached $12.5 billion, also the highest level since 2008.

Exports of goods were up by $23.1 billion to $204.8 billion in the second quarter of 2022. The largest contributor was energy products, up $12.7 billion as prices increased 30.6% while volumes were slightly down. Metal and non-metallic mineral products also contributed with an increase of $2.4 billion on higher volumes.

Chart 1  Chart 1: Current account balances
Current account balances

Meanwhile, imports of goods rose by $18.9 billion to $192.4 billion, the highest increase since the third quarter of 2020. Imports of energy products were up $3.2 billion in the second quarter of 2022 on higher prices. Motor vehicles and parts rose by $3.1 billion on stronger volumes, and consumer goods increased by $3.1 billion as volumes and prices rose.

On a geographical basis, the goods surplus with the United States was up by $7.3 billion to reach a record of $40.0 billion in the second quarter. The goods deficit with countries other than the United States increased by $3.0 billion. The trade balances with China, The Netherlands, and Mexico, showed the largest declines, mostly on higher imports.

The trade in services deficit expanded by $1.5 billion to $3.4 billion in the second quarter. With nearly twice the number of Canadian tourists travelling abroad compared with the first quarter, the travel services balance posted a $0.4 billion deficit in the second quarter, the first deficit since the first quarter of 2020 as this activity continues to recover. The transport services deficit increased by $0.5 billion in the second quarter of 2022 on higher imports of marine transport services as well as higher imports of services related to the movements of passengers.

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

The investment income deficit expands further

The investment income deficit widened by $3.3 billion to $4.6 billion in the second quarter, as payments increased by more than receipts. This was the highest deficit since the fourth quarter of 2014. The overall growth in investment income transactions reflected in part rising interest rates and commodity prices.

Profits earned by foreign direct investors on their assets in Canada were up $2.8 billion, led by the energy sector. In addition, interest and dividends earned by foreign portfolio investors on their holdings of Canadian securities were up $1.5 billion to a record $17.8 billion. Earnings of Canadian investors on their assets abroad increased as well in the second quarter but at a slower pace.

Financial account

Foreign investment in Canadian securities slows significantly

After investing $74.0 billion in the first quarter, foreign investors increased their holdings of Canadian securities by $7.9 billion in the second quarter. This was the lowest level of investment since the fourth quarter of 2019. Investors increased their exposure to the Canadian bond market but reduced their holdings of equities and money market instruments.

Foreign investment in Canadian debt securities slowed substantially compared with the first quarter. New issues abroad of Canadian corporate bonds denominated in foreign currencies were moderated by a divestment of $24.0 billion in government debt securities. In addition, non-resident investors reduced their exposure to Canadian equity securities by $14.3 billion in the second quarter, a first reduction since the second quarter of 2020. The bulk of the foreign divestment was in shares of the banking sector in the second quarter of 2022. Share prices for Canadian banks, as measured by Standard and Poor's/Toronto Stock Exchange banking sector index, fell by 13.8%.

Chart 3  Chart 3: Foreign portfolio investment
Foreign portfolio investment

Canadian investment in foreign securities resumes

Canadian acquisitions of foreign securities totalled $17.9 billion in the second quarter. This activity followed a record divestment of $46.6 billion in the first quarter.

Canadian investors increased their exposure to non-US foreign shares by $10.4 billion in the second quarter, after selling $8.7 billion worth of these instruments in the first quarter. At the same time, Canadian investors continued their acquisitions of foreign debt securities, adding $13.9 billion to their holdings. Purchases of non-US foreign bonds and money market instruments were the main contributor to the activity.

Direct investment increases

Direct investment abroad reached $37.4 billion in the second quarter, up from $21.9 billion in the first quarter. Mergers and acquisitions activity accounted for $13.7 billion in the second quarter and mainly involved firms located in the United States. On a sector basis, more than three quarters of the overall direct investment abroad was in the finance and insurance and the management of companies and enterprises sectors.

Direct investment in Canada totalled $24.9 billion in the second quarter, the highest level in three years. Earnings reinvested in Canadian affiliates by their foreign parents contributed to $17.0 billion of the total. Mergers and acquisitions activity amounted to $3.4 billion, down from $8.6 billion in the first quarter. The energy, mining and manufacturing sectors were the largest recipients of foreign direct investment in the second quarter. On a country basis, more than half of the quarterly flows originated from the United States and the Netherlands.

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 (+) or net borrowing (-) derived from the sum of the current and capital accounts corresponds to a net lending (+) or 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, 36-10-0473-01 and 36-10-0656-01. 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 Statistics Canada's 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 September 6. For more information, see Real-time tables.

Next release

Balance of international payments data for the third quarter will be released on November 28.


The product Canada's international trade and investment country fact sheet (Catalogue number71-607-X) is available online. This product provides easy and centralized access to Canada's international trade and investment statistics, on a country-by-country basis. It contains annual information for nearly 250 trading partners in summary form, including charts, tables and a short analysis that can also be exported in PDF format.

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 Economic accounts statistics and International trade statistics portals are available from the Subjects module of the Statistics Canada website.

The product Methodology for Exports of Energy Products within the International Merchandise Trade Program, which is part of Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X), is 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, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; or Media Relations (

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