Canada Current Account

The balance on the international trade in goods posted a $0.8 billion surplus in the fourth quarter, following an $8.6 billion deficit the previous quarter. Total exports of goods rose $6.3 billion to $136.5 billion in the fourth quarter. Energy products, led by crude petroleum, were the major contributor with exports up $4.7 billion on higher prices and, to a lesser extent, higher volumes. Total imports of goods were down $3.1 billion to $135.8 billion. Industrial machinery, equipment and parts recorded the largest reduction, down $2.7 billion. This followed a high in the third quarter, with activity dominated by the import of a large module for the Hebron offshore oil project in Newfoundland and Labrador. 

On a geographical basis, the goods surplus with the United States, led by stronger exports of energy products, increased $3.7 billion to $12.0 billion in the fourth quarter. Meanwhile, the deficit with non-US countries narrowed by $5.7 billion to $11.2 billion, mainly on record exports.

The overall deficit on international trade in services remained at $5.5 billion in the fourth quarter.In the fourth quarter, the travel deficit was unchanged at $3.6 billion. Receipts and payments rose as both the number of international overnight travellers visiting Canada and the number of Canadians travelling abroad for one or more nights increased. In the fourth quarter, the travel deficit was unchanged at $3.6 billion. Receipts and payments rose as both the number of international overnight travellers visiting Canada and the number of Canadians travelling abroad for one or more nights increased.

The investment income deficit, the difference between incomes generated on Canada’s international assets and liabilities, increased $0.5 billion to $4.8 billion in the fourth quarter. Profits earned by foreign direct investors on their Canadian assets were up $1.3 billion to their highest level since the end of 2014. On the receipt side, profits earned by Canadian direct investors on their assets abroad increased by $1.1 billion. Higher income payments on foreign holdings of Canadian securities, both equity and debt securities, also contributed to the increase in the deficit in the fourth quarter.

For the year 2016, the current account deficit edged up $0.1 billion to $67.7 billion. The goods deficit was up $2.9 billion to a record $25.9 billion, mainly due to decline by $3.6 billion in exports as energy products continued to fall. By contrast, imports edged down by $0.7 billion. The services deficit narrowed $2.4 billion to $22.1 billion on a lower travel deficit. Spending by foreign travellers in Canada increased by $2.9 billion.