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Canada's current account deficit with the rest of the world hit a record $13.1 billion in the third quarter, as imports mainly of auto products gained, government figures showed today.
The figure was slightly less than the $13.2 billion, in line with economists’ expectations. Imports and exports were both higher after three quarters of declines, but imports advanced more than exports, Statistics Canada said.
The current account is the broadest measure of a country's trade with the rest of the world, including income from financial transactions as well as goods and services.
StatsCan said cross-border activity in stocks and mergers and acquisitions was particularly strong in the quarter.
Foreign buying of Canadian securities hit $19 billion, with most of that going into the stock market, StatsCan said. Canadian investors however cut their holdings of foreign securities for the first time since the fourth quarter of 2008. That was mainly due to Canadian investors shedding their holdings in U.S. Treasuries and non-U.S. borrowers selling Canadian dollar bonds.
Foreign direct investment in Canada also rebounded in the third quarter, hitting $17 billion after two quarters of slow trade, StatsCan said. Canadian direct foreign investment reached $25.6 billion as Canadian companies went on a buying spree for foreign firms. Most of the activity was in the U.S.
Canada still has a trade surplus with the U.S., its biggest trading partner. However that surplus is narrowing as imports from the U.S. outpaced Canadian exports.