Canada's Q1 Current Account Deficit Widens Much More Than Expected on Lower Investment Income, Higher Goods Deficit

08:42 AM EDT, 05/28/2026 (MT Newswires) -- Canada's current account deficit on a seasonally adjusted basis widened by $6.2 billion to $7.2 billion in Q1, said the country's statistical agency on Thursday.

The Q1 deficit was much higher than the $3.9 billion consensus deficit provided by MUFG.

This widening of the deficit reflected a reduction in the investment income surplus, as well as an increase in the trade in goods deficit, noted Statistics Canada in a statement. Q1 2026 marked the 15th consecutive quarter in which the current account balance was in a deficit position.

The investment income surplus, the difference between income earned on international financial assets and paid on international liabilities, narrowed by $4.9 billion to $2.5 billion in Q1, added StatsCan. This was largely due to a decrease in the direct investment income surplus. Profits earned by foreign direct investors on their assets in Canada, led by the energy and mining sector, increased more in Q1 than those earned by Canadian direct investors on their assets abroad.

The trade in goods deficit widened by $3.3 billion to $7.7 billion in Q1, 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 Q1. 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.

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