Canada’s current account deficit, adjusted for seasonal factors, widened by $19.8 billion in the second quarter to reach a record $21.2 billion, Statistics Canada has reported.
The increase was largely due to weaker exports. The previous record current account deficit occurred in the third quarter of 2010, when the shortfall was more evenly spread across goods, services and investment income.
In the financial account, which is not adjusted for seasonal variation, inflows of funds from abroad to finance the deficit primarily came from currency and deposit transactions in the second quarter.
Following two consecutive quarterly increases, goods exports fell 13.1% to $182.2 billion in the second quarter of 2025, the lowest value since the fourth quarter of 2021. Both exports and imports declined after reaching record highs in the first quarter.
Declines in goods exports were widespread and coincided with the implementation of U.S. tariffs on Canadian products, as well as a sharp appreciation of the Canadian dollar compared with the U.S. dollar in the quarter.
The goods trade surplus with the U.S. narrowed from $31.3 billion in the first quarter to $10.1 billion in the second. Meanwhile, the goods trade deficit with countries other than the U.S. narrowed from $31.8 billion to $29.6 billion.
Services exports fell 1.2% to $54.6 billion and imports declined 1.9% to $54.5 billion in the second quarter. Commercial services exports rose 3.3% to $32.5 billion, while imports edged up 0.2% to $31.2 billion.