Canada's balance of international payments,
fourth quarter 2016
Released at 8:30 a.m. Eastern time in The Daily, Wednesday, March 1, 2017
Canada's current account deficit (on a seasonally adjusted basis) narrowed by $9.0 billion in the fourth quarter to
$10.7 billion as the goods balance posted its first surplus in more than two years.
In the financial account (unadjusted for seasonal variation), foreign investment in Canadian private corporate
securities led the inflow of funds in the economy in the quarter.
For the year 2016, the current account deficit edged up $0.1 billion to $67.7 billion. The deficit on goods expanded,
mainly on lower exports of energy products. A lower deficit on services moderated the overall increase in the
current account deficit in 2016.
In the financial account, transactions in securities generated a record net inflow of funds of $147.5 billion in 2016.
These inflows were partially offset by outflows in direct and other investment. Direct investment abroad exceeded
direct investment in Canada by $43.3 billion in 2016.
Since the return to a current account deficit in 2009, the funding of this deficit has mostly come from transactions in
securities. Foreign investment in Canadian securities has steadily exceeded Canadian investment in foreign
securities during this period.
Chart 1
Net international transactions in securities and current account balance, annual
billions of dollars
200
150
100
50
0
-50
-100
2009
2010
2011
2012
2013
2014
2015
2016
Net international transactions in securities
Current account balance
Note(s): Net international transactions in securities refers to the difference between foreign investment in Canadian securities and Canadian investment in foreign
securities.
Source(s): CANSIM tables 376-0101 and 376-0102.
The Daily, Wednesday, March 1, 2017
Current account
Trade in goods balance moves to a surplus
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. For the year as a whole, the goods deficit was up $2.9 billion to a record
$25.9 billion.
Chart 2
Current account balances
billions of dollars
5
0
-5
-10
-15
-20
-25
IV I
2011
II III
2012
Goods
IV
I
II III
2013
IV
I
II III
2014
IV
I
II III
2015
IV
I
II III
2016
IV
Other current account components
Total
Note(s): Data are seasonally adjusted.
Source(s): CANSIM table 376-0105.
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.
2
Component of Statistics Canada catalogue no. 11-001-X
The Daily, Wednesday, March 1, 2017
Chart 3
Goods balances by geographic area
billions of dollars
20
15
10
5
0
-5
-10
-15
-20
IV I
2011
II III
2012
IV
I
II III
2013
IV
I
II III
2014
United States
IV
I
II III
2015
IV
I
II III
2016
IV
All other countries
All countries
Note(s): Data are seasonally adjusted.
Source(s): CANSIM table 376-0106.
Exports of goods increase while imports decrease
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. Despite the gains in the fourth quarter, exports were down by $3.6 billion in 2016 as energy products
continued to decline.
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. For the year, imports
edged down by $0.7 billion.
Balance on trade in services unchanged
The overall deficit on international trade in services remained at $5.5 billion in the fourth quarter. For the year 2016,
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 in 2016.
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.
Component of Statistics Canada catalogue no. 11-001-X
3
The Daily, Wednesday, March 1, 2017
The deficit on transport services was down $0.2 billion, mostly due to lower payments on water transport. This was
partially offset by a $0.1 billion reduction in the commercial services surplus.
Deficit on investment income expands
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.
Financial account
Foreign investors acquire Canadian private corporate securities
Foreign investment in Canadian securities totalled $33.3 billion in the fourth quarter, led by acquisitions of
instruments issued by private corporations. For the year, foreign acquisitions of Canadian securities reached a
record $161.3 billion.
Foreign investment in Canadian bonds slowed to $11.6 billion, from $34.0 billion in the third quarter. Non-resident
investors also acquired $4.7 billion of Canadian money market instruments. This activity was led by new issues
abroad of private corporate debt securities denominated in US dollars.
Foreign investors added $17.0 billion of Canadian shares to their holdings in the fourth quarter, the largest
investment since the second quarter of 2004. Canadian stock prices were up by 3.8% and the Canadian dollar
depreciated against its US counterpart by 1.8 US cents in the quarter.
4
Component of Statistics Canada catalogue no. 11-001-X
The Daily, Wednesday, March 1, 2017
Chart 4
Foreign investment in Canadian securities
billions of dollars
60
50
40
30
20
10
0
-10
-20
IV I
2011
II III
2012
IV
I
II III
2013
IV
Governments
I
II III
2014
IV
I
II III
2015
IV
I
II III
2016
IV
Corporations
Source(s): CANSIM table 376-0132.
Canadian portfolio investment abroad slows
Canadian investment in foreign securities slowed to $0.7 billion in the fourth quarter, from $8.0 billion in the third
quarter. Purchases of foreign shares were moderated by sales of foreign debt securities.
Canadian investment in foreign shares amounted to $10.1 billion, led by purchases of non-US foreign shares. At the
same time, Canadian holdings of foreign debt securities were down by $9.4 billion, the largest decline since the
fourth quarter of 2008. A record divestment in US Treasury instruments contributed to the decline in the quarter.
Outward direct investment outpaces inward direct investment
Direct investment abroad reached $29.8 billion in the fourth quarter, with the investment almost entirely in the form
of equity instruments. Approximately one-half of the investment was related to merger and acquisition activities, and
about half of the direct investment abroad was in the United States. The fourth quarter closed a year of strong
outward direct investment by Canadian corporations, led by mergers and acquisitions activity.
Direct investment in Canada was $9.7 billion in the fourth quarter, slightly higher than the $9.1 billion recorded in the
third quarter. For a second straight quarter, equity investment made by foreign parents in Canadian affiliates
accounted for all of the investment as there was a reduction in debt liabilities of Canadian affiliates to their foreign
parents. For the year, inward direct investment was the lowest since 2011 at $41.8 billion.
Component of Statistics Canada catalogue no. 11-001-X
5
The Daily, Wednesday, March 1, 2017
Chart 5
Foreign direct investment
billions of dollars
45
40
35
30
25
20
15
10
5
0
IV I
2011
II III
2012
IV
I
Direct investment assets
II III
2013
IV
I
II III
2014
IV
I
II III
2015
IV
I
Direct investment liabilities
Source(s): CANSIM table 376-0104.
6
Component of Statistics Canada catalogue no. 11-001-X
II III
2016
IV
The Daily, Wednesday, March 1, 2017
In celebration of the country's 150th birthday, Statistics Canada is presenting
snapshots from our rich statistical history.
Data on the current account of the balance of payments are available from 1926.
Since that time, trade in goods, also referred to as "visible items" at the time, has
accounted for the larger share of the international activity in comparison with
non-goods trade, or "invisible items".
With the exception of the period 1930 to 1945, characterized by the effects of the Great Depression and the
Second World War, trade in goods has always accounted for approximately 70% to 80% of all current account
transactions. Today it represents 70%.
Chart 6
Canada 150 – Trade in goods as a share of total current account transactions, 1926 to 2016
%
80
75
70
65
60
55
50
1926
1934
1942
1950
1958
1966
1974
1982
1990
1998
2006
2014
Note(s): Definitions of goods and current account from the two CANSIM tables are not fully equivalent.
Source(s): CANSIM table 376-0001 for 1926 to 1980 and CANSIM table 376-0101 for 1981 to 2016.
Component of Statistics Canada catalogue no. 11-001-X
7
The Daily, Wednesday, March 1, 2017
Table 1
Balance of payments – Not seasonally adjusted
Fourth
quarter 2015
First quarter
2016
Second
quarter 2016
Third quarter
2016
Fourth
quarter 2016
2015
2016
millions of dollars
Capital account and current account
Net lending / net borrowing, from capital
account and current account
Current account balances
Goods and services
Goods
Services
Primary income
Compensation of employees
Investment income
Direct investment
Portfolio investment
Other investment
Secondary income
Capital account balance
Financial account1,2
Net lending / net borrowing, from financial
account
Net acquisition of financial assets
Direct investment assets
Direct investment assets, equity
Direct investment assets, debt instruments
Canadian portfolio investment in foreign
securities
Foreign debt securities
Foreign money market instruments
Foreign bonds
Foreign equity and investment fund shares
Official international reserves
Other Canadian investment abroad
Loans
Currency and deposits
Trade credits and advances
Other accounts receivable
Net incurrence of liabilities
Direct investment liabilities
Direct investment liabilities, equity
Direct investment liabilities, debt instruments
Foreign portfolio investment in Canadian
securities
Canadian debt securities
Canadian money market instruments
Canadian bonds
Canadian equity and investment fund shares
Other foreign investment in Canada
Loans
Currency and deposits
Special drawing rights
Trade credits and advances
Other accounts payable
Discrepancy (net errors and omissions)
-13,814
-13,812
-9,063
-3,817
-5,246
-3,801
-460
-3,341
1,861
-5,395
193
-948
-2
-19,444
-19,393
-13,247
-5,311
-7,936
-4,079
-428
-3,651
2,716
-5,574
-793
-2,067
-51
-20,823
-20,823
-18,668
-12,664
-6,004
-2,176
-501
-1,674
3,680
-5,246
-108
20
0
-19,415
-19,375
-14,293
-10,943
-3,350
-4,620
-493
-4,128
1,696
-5,495
-329
-461
-40
-8,104
-8,104
-1,758
3,049
-4,807
-5,709
-440
-5,268
831
-5,709
-391
-637
0
-67,659
-67,552
-47,457
-23,002
-24,455
-16,489
-1,960
-14,529
8,643
-22,329
-844
-3,606
-106
-67,786
-67,695
-47,967
-25,869
-22,098
-16,584
-1,862
-14,722
8,924
-22,025
-1,621
-3,145
-91
-12,640
63,999
9,986
17,233
-7,246
-19,529
13,217
16,468
15,225
1,243
-17,303
73,753
13,686
18,892
-5,206
-14,119
45,930
25,206
23,885
1,321
-14,147
64,390
29,755
29,653
103
-68,275
201,722
102,158
80,604
21,554
-65,099
197,290
85,115
87,655
-2,539
37,021
22,946
-268
23,215
14,074
3,580
13,413
-1,635
11,157
73
3,817
76,640
318
19,440
-19,121
-8,774
5,204
-1,182
6,387
-13,978
1,553
3,971
13,217
-897
86
-8,435
32,747
10,186
5,799
4,387
13,812
1,676
11
1,665
12,135
2,552
43,703
2,914
35,857
-235
5,167
91,056
12,731
8,649
4,082
8,008
-3,705
695
-4,399
11,713
1,464
11,252
1,334
6,839
-77
3,157
60,049
9,142
13,775
-4,633
747
-9,390
-1,128
-8,262
10,137
1,821
32,067
-6,979
18,876
565
19,605
78,537
9,741
17,451
-7,711
60,236
34,873
-1,441
36,314
25,363
10,911
28,417
22,644
4,235
173
1,365
269,997
69,508
76,364
-6,857
13,792
-6,214
-1,604
-4,610
20,006
7,390
90,992
10,485
60,675
339
19,493
262,389
41,800
45,674
-3,874
23,655
14,322
4,124
10,198
9,333
52,666
1,666
50,451
0
306
243
49,357
39,127
3,881
35,246
10,230
-26,797
2,072
-29,316
0
230
217
41,577
25,576
1,642
23,934
16,001
36,747
2,412
34,521
0
-504
317
37,078
26,905
-7,143
34,048
10,173
13,829
-3,556
17,028
0
-35
392
33,264
16,294
4,727
11,568
16,970
35,532
9,771
25,408
0
110
242
106,024
91,599
6,058
85,542
14,425
94,466
12,009
80,474
0
915
1,068
161,276
107,902
3,107
104,795
53,374
59,312
10,700
47,641
0
-198
1,170
1,174
-85
3,520
5,296
-6,043
-616
2,687
1. Transactions are recorded on a net basis.
2. In the financial account, a plus sign denotes an increase in investment and a minus sign denotes a decrease in investment.
Source(s): CANSIM tables 376-0101, 376-0102, 376-0103 and 376-0104.
8
Component of Statistics Canada catalogue no. 11-001-X
The Daily, Wednesday, March 1, 2017
Table 2
Current account – Seasonally adjusted
Fourth quarter
2015
First quarter
2016
Second quarter
2016
Current account receipts
Goods and services
Goods
Services
Travel
Transportation
Commercial services
Government services
Primary income
Compensation of employees
Investment income
Direct investment
Interest
Profits
Portfolio investment
Interest on debt securities
Dividends on equity and investment fund shares
Other investment
Secondary income
Private transfers
Government transfers
182,864
157,390
131,345
26,046
5,413
3,935
16,307
391
22,895
436
22,459
12,263
1,559
10,704
7,801
2,428
5,374
2,394
2,579
939
1,640
181,602
156,942
130,372
26,570
5,788
4,020
16,367
396
22,005
444
21,561
11,478
1,330
10,148
7,871
2,564
5,306
2,213
2,654
941
1,713
177,128
150,674
124,192
26,482
5,910
3,995
16,192
384
23,195
442
22,753
12,518
1,390
11,129
7,855
2,679
5,176
2,379
3,259
1,661
1,599
Current account payments
Goods and services
Goods
Services
Travel
Transportation
Commercial services
Government services
Primary income
Compensation of employees
Investment income
Direct investment
Interest
Profits
Portfolio investment
Interest on debt securities
Dividends on equity and investment fund shares
Other investment
Secondary income
Private transfers
Government transfers
199,458
168,601
136,611
31,990
9,557
6,390
15,748
294
27,040
906
26,134
10,569
1,188
9,381
13,250
9,761
3,489
2,314
3,817
2,475
1,343
199,422
169,378
137,127
32,251
9,520
6,480
15,958
293
26,197
909
25,287
9,184
1,073
8,111
13,477
9,961
3,516
2,627
3,847
2,403
1,445
Current account balances
Goods and services
Goods
Services
Travel
Transportation
Commercial services
Government services
Primary income
Compensation of employees
Investment income
Direct investment
Interest
Profits
Portfolio investment
Interest on debt securities
Dividends on equity and investment fund shares
Other investment
Secondary income
Private transfers
Government transfers
-16,595
-11,211
-5,266
-5,945
-4,145
-2,456
559
97
-4,145
-470
-3,675
1,694
371
1,323
-5,449
-7,334
1,885
80
-1,239
-1,536
297
-17,820
-12,436
-6,755
-5,681
-3,732
-2,461
409
103
-4,192
-466
-3,726
2,294
257
2,037
-5,606
-7,396
1,790
-414
-1,193
-1,462
269
Third quarter
2016
Fourth quarter
2016
2015
2016
183,661
157,393
130,257
27,136
6,142
4,159
16,446
388
23,392
445
22,947
12,251
1,413
10,837
7,973
2,733
5,241
2,723
2,876
966
1,910
191,350
163,522
136,547
26,976
6,217
4,146
16,216
397
24,738
450
24,288
13,429
1,459
11,970
8,015
2,707
5,308
2,844
3,090
989
2,101
729,457
627,236
524,940
102,296
21,179
15,606
63,946
1,565
91,097
1,692
89,405
51,764
5,484
46,280
29,272
9,017
20,255
8,369
11,123
3,687
7,437
733,741
628,531
521,368
107,163
24,057
16,319
65,221
1,565
93,329
1,781
91,548
49,676
5,592
44,083
31,714
10,683
21,031
10,158
11,880
4,557
7,323
196,529
167,415
135,489
31,926
9,473
6,385
15,769
299
25,598
913
24,685
8,956
1,046
7,910
13,089
9,578
3,511
2,640
3,515
2,395
1,120
203,410
171,519
138,867
32,652
9,724
6,506
16,119
303
28,139
910
27,230
10,665
1,055
9,610
13,408
9,807
3,602
3,156
3,751
2,399
1,352
202,076
168,186
135,754
32,432
9,847
6,337
15,944
304
29,979
910
29,069
11,947
1,055
10,892
13,765
10,007
3,758
3,356
3,911
2,444
1,467
797,009
674,693
547,942
126,751
38,515
25,826
61,234
1,176
107,586
3,652
103,934
43,121
4,571
38,550
51,601
37,605
13,996
9,213
14,730
9,583
5,147
801,436
676,498
547,237
129,261
38,564
25,708
63,790
1,199
109,913
3,643
106,270
40,752
4,229
36,523
53,739
39,352
14,387
11,779
15,025
9,641
5,384
-19,400
-16,741
-11,297
-5,444
-3,563
-2,390
423
85
-2,403
-471
-1,932
3,562
344
3,218
-5,234
-6,899
1,665
-260
-256
-734
479
-19,749
-14,127
-8,610
-5,516
-3,582
-2,347
327
85
-4,747
-465
-4,283
1,586
359
1,227
-5,435
-7,074
1,639
-434
-875
-1,433
558
-10,726
-4,663
793
-5,456
-3,630
-2,191
272
93
-5,241
-460
-4,781
1,482
404
1,078
-5,750
-7,300
1,550
-513
-821
-1,455
634
-67,552
-47,457
-23,002
-24,455
-17,336
-10,221
2,713
389
-16,489
-1,960
-14,529
8,643
913
7,730
-22,329
-28,588
6,259
-844
-3,606
-5,896
2,289
-67,695
-47,967
-25,869
-22,098
-14,507
-9,389
1,431
366
-16,584
-1,862
-14,722
8,924
1,363
7,561
-22,025
-28,669
6,644
-1,621
-3,145
-5,084
1,939
millions of dollars
Source(s): CANSIM tables 376-0101 and 376-0105.
Component of Statistics Canada catalogue no. 11-001-X
9
The Daily, Wednesday, March 1, 2017
Note to readers
Definitions
The balance of international payments covers all economic transactions between Canadian residents and non-residents in three
accounts: the current account, the capital account and the financial account.
The current account covers transactions in goods, services, compensation of employees, investment income and secondary income
(current transfers).
The current account data in this release are seasonally adjusted. For information on seasonal adjustment, see Seasonally adjusted data
– Frequently asked questions.
The capital account covers capital transfers and transactions in non-produced, non-financial assets.
The financial account covers transactions in financial assets and liabilities.
In principle, a net lending (+) / net borrowing (-) derived from the sum of the current and capital accounts corresponds to a net lending (+)
/ net borrowing (-) derived from the financial account. In practice, as data are compiled from multiple sources, this is rarely the case and
gives rise to measurement error. The discrepancy (net errors and omissions) is the unobserved net inflow or outflow.
For more information on the balance of payments, consult the Frequently asked questions section in the System of macroeconomic
accounts module of our website. The module also presents the most recent balance of payments statistics.
Real-time CANSIM table
Real-time CANSIM table 376-8105 will be updated on March 13. For more information, consult the document, Real-time CANSIM tables.
Next release
Balance of international payments data for the first quarter will be released on May 30.
Available in CANSIM: tables 376-0012, 376-0013, 376-0101 to 376-0108, 376-0110, 376-0111 and
376-0121 to 376-0124.
Definitions, data sources and methods: survey numbers 1534, 1535, 1536 and 1537.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available. This publication
will be updated to maintain its relevance.
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300;
[email protected]).
To enquire about the concepts, methods or data quality of this release, contact Denis Caron (613-808-2278;
[email protected]), International Accounts and Trade Division.
10
Component of Statistics Canada catalogue no. 11-001-X