Canada's Current Account Deficit Narrows in Q4; 2025 Goods Surplus With The U.S. Posts Large Slip

08:48 AM EST, 02/26/2026 (MT Newswires) -- Canada's current account deficit on a seasonally adjusted basis narrowed by $4.6 billion to $0.7 billion in Q4 2025, said the country's statistical agency on Thursday.

Q4 marked the 14th consecutive quarter in which the current account balance was in a deficit position, noted Statistics Canada in a statement.

In the financial account -- unadjusted for seasonal variation -- the international demand for Canadian bonds remained strong in Q4, led by an unprecedented international investment in federal government bonds, pointed out StatsCan. Meanwhile, international direct investment in Canada, mainly resulting from merger and acquisition activities, largely surpassed Canadian direct investment abroad.

The year 2025 was marked by trade tensions, volatility in some commodity prices, declines in interest rates and strong global stock markets performances. All these factors had significant impacts on balance of payments flows in 2025, both in the current and financial accounts.

For the year 2025, the current account balance posted a $30.4 billion deficit, doubling from $15.0 billion in 2024, according to the Ottawa-based agency. The widening of the deficit was largely due to the trade in goods deficit increasing from $7.2 billion in 2024 to $31.1 billion in 2025 -- the largest deficit since 2020 -- as imports of goods increased and exports edged down. Increases in both the services and the investment income surpluses moderated the overall increase in the current account deficit in 2025.

Canada's trade with the United States resulted in a "significant" decrease of the goods surplus, from $101.3 billion in 2024 to $81.8 billion in 2025. Meanwhile, Canada's services trade deficit with the U.S. narrowed from $10.0 billion in 2024 to $2.2 billion in 2025.

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