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Canada's balance of international payments, third quarter 2023

Released: 2023-11-29

Current account balance

-$3.2 billion

Third quarter 2023

Canada's current account deficit (on a seasonally adjusted basis) narrowed to $3.2 billion in the third quarter after recording larger deficits in the first two quarters of 2023. This reduction mainly reflected the goods balance returning to a surplus, partially offset by a slight widening in the services deficit and a shrinking investment income surplus. Higher exports of goods, paired with a decline in imports, pushed the goods balance into a surplus of $0.8 billion in the quarter, with the remainder of the current account posting a $4.0 billion deficit.

In the financial account (unadjusted for seasonal variation), inflows of funds from abroad to finance the current account deficit mainly came from transactions in the form of loans as well as currency and deposits in the third quarter. Meanwhile, portfolio investment moderated the overall borrowing activity and generated an unprecedented outflow of funds of $41.4 billion. Strong acquisitions of foreign securities, combined with record retirements of Canadian government bonds, contributed the most to this outflow of funds.

Current account

Energy prices drive goods exports gains

Exports of goods were up 2.9% to $192.3 billion in the third quarter, as energy products increased 14.5% to $44.6 billion, almost entirely due to higher prices for crude oil. Imports of goods were down 0.8% to $191.5 billion, as an increase in imports of passenger cars and light trucks (+9.2% to $38.3 billion) partially offset declines in chemical products (-7.5%), consumer goods (-2.8%), and metal products (-5.4%).

On a geographical basis, the goods surplus with the United States was up by $6.6 billion to $30.0 billion in the third quarter, with exports increasing by $7.0 billion. The deficit with countries other than the United States narrowed by $0.4 billion to $29.2 billion, led by a narrowing trade deficit with China and a flip from a deficit to a surplus with the United Kingdom.

Chart 1  Chart 1: Current account balances
Current account balances

The services deficit widens slightly

International trade in services recorded a 10th consecutive quarterly deficit in the third quarter, largely due to trade deficits for transportation services. The transportation services trade deficit narrowed to $3.5 billion in the third quarter, as imports (-5.4%) declined more than exports (-0.4%). The travel services trade deficit widened by $0.4 billion to $1.2 billion, as the increase in personal travel expenses by Canadians outside of Canada outpaced that of non-residents in Canada. The commercial services surplus decreased by $0.4 billion to $1.0 billion, as higher imports, led by computer services (+7.2%), more than offset a smaller increase in exports, mainly in research and development services, management services, and advertising services.

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

Higher deficit for investment income

The investment income surplus narrowed by $2.6 billion to $2.1 billion in the third quarter. Income on deposits and loans, both in Canada and abroad, was up, with payments increasing by more than receipts. This was mostly related to Canadian banks' international activities. At the same time, both profits earned by Canadian direct investors abroad and by foreign direct investors in Canada increased.

Financial account

Canadian investment in foreign securities up

Canadian investors increased their holdings of foreign securities by $31.3 billion in the third quarter, the highest investment since the fourth quarter of 2021. Investors acquired both equity (+$20.3 billion) and debt securities (+$11.0 billion) in the third quarter of 2023, with about two-thirds of these investments being in US instruments.

Foreign investors reduced their exposure to Canadian securities by $10.1 billion in the third quarter, evenly split between debt and equity securities. Record retirements of government bonds were moderated by new issuances abroad of private corporate bonds denominated in foreign currency. The divestment in debt securities (-$4.9 billion) followed significant investments recorded since the second quarter of 2021. In addition, non-resident investors reduced their exposure to Canadian equities by $5.3 billion in the third quarter of 2023, largely shares of the banking sector. Since the beginning of the year, the foreign divestment in Canadian equity securities totalled $40.7 billion.

Chart 3  Chart 3: Foreign portfolio investment
Foreign portfolio investment

Foreign direct investment increases

Canadian direct investment abroad reached $29.3 billion in the third quarter, up significantly from a $12.9 billion investment in the second quarter. Earnings reinvested in foreign affiliates by their Canadian parents (+$19.0 billion) accounted for most of the activity in the third quarter. Merger and acquisition transactions remained modest and totalled $6.7 billion. The finance and insurance sector accounted for just over one-third of all the activity, while the bulk of the investments were directed to the United States.

In the third quarter, foreign direct investment in Canada amounted to $20.4 billion, almost doubling the value of the second quarter. Earnings reinvested by foreign parents in Canadian affiliates (+$9.0 billion) accounted for most of the investment. Merger and acquisition activity slowed to $3.6 billion, the lowest level in a year. The manufacturing sector was the largest recipient of foreign direct investment in the third quarter.

Chart 4  Chart 4: Foreign direct investment
Foreign direct investment

  Note to readers


This release incorporates statistical revisions back to 2020 as part of the annual revision exercise of the Canadian System of Macroeconomic Accounts. Revisions reflect, in large part, the integration of benchmark survey data and updates resulting from the integration of trade data in the broader analytical context of the supply-use tables.

Revisions also reflect the integration of new data sources as well as updates to coverage and statistical methods, including the introduction of updated seasonal factors contributing to revisions to quarterly figures and patterns.

International trade in goods data by product are now classified according to the North American Product Classification System (NAPCS) 2022 version 1.0. Previously, NAPCS 2017 version 1.0 was used to classify trade in goods by product. While the number of published categories remains the same, the composition of these categories is impacted, resulting in changes within published results. Quarterly NAPCS 2022 values are available from 1988.


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 December 11. For more information, see Real-time data tables.

Next release

Balance of international payments data for the fourth quarter will be released on February 28, 2024.


The document, "Enterprise surveys and the measurement of digital trade in services in Canada," which is part of Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X), is now available.

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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