Canada’s current account deficit (on a seasonally adjusted basis) widened by $6.2 billion to $7.2 billion in the first quarter. This widening of the deficit reflected a reduction in the investment income surplus, as well as an increase in the trade in goods deficit. The first quarter of 2026 marked the 15th consecutive quarter in which the current account balance was in a deficit position, reported Statistics Canada.
While the growth in good imports was mainly in metal and non-metallic mineral products in the first quarter, increases in goods exports continued for a narrow set of commodities, namely crude oil, natural gas and gold. Meanwhile, exports of autos and forestry fell to levels last seen in 2021 and 2020, said the federal agency.
In the first quarter of 2026, in the financial account (unadjusted for seasonal variation), inflows of funds from abroad to finance the current account deficit came largely from foreign investment in Canadian bonds. While Canadian investors continued to decrease their exposure to US government debt instruments, foreign investors increased their holdings of Canadian government and corporate bonds by a record amount in the first quarter. Meanwhile, the direct investment activity generated a net outflow of funds totalling $17.2 billion, as direct investment abroad rose in the quarter, following a net inflow in the previous quarter, it noted.
“The trade in goods deficit widened by $3.3 billion to $7.7 billion in the first quarter, as imports rose at a faster rate than exports. Imports of goods were up 5.5% to reach a record high of $211.0 billion in the first quarter. The main contributor to this increase was higher imports of metal and non-metallic mineral products (+38.3%), largely gold, as prices for precious metals increased significantly in the quarter,” it said.
“Exports of goods rose 3.9% to $203.3 billion in the first quarter, following a similarly sized increase in the fourth quarter or 2025. Energy products (+16.1%), largely crude oil, and metal and non-metallic mineral products (+11.2%), largely gold, led the increase in exports in the first quarter of 2026. Exports of motor vehicles declined 10.7% to reach $19.1 billion in the first quarter, their lowest level since the second quarter of 2020.
“The composition of Canada’s trade in goods deficit has changed significantly in recent years. In the first quarter of 2026, the trade surplus in energy products reached its highest quarterly level on record since 2022, at $36.5 billion, while the trade balance in autos posted a record-high deficit. Quarterly energy exports reached their second-highest value on record, more than twice the value of motor vehicles and 4.6 times higher than forestry product exports.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
About Us
Canada’s Entrepreneur is the number one community media platform in Canada for entrepreneurs and business owners. Established in 2016, our podcast team has interviewed over 800 Canadian entrepreneurs from coast-to-coast. With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 250,000 + audio downloads, 50,000 + average monthly social impressions, 15,000 + engaged social followers and 120,000 newsletter subscribers. Canada’s Entrepreneur is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story
