Tuesday, March 8, 2005

Record current account surplus

CANADA’S current account surplus with the rest of the world reached a record high in 2004.

Even so, the surplus for the entire year hit a record high. The current account covers transactions in goods, services, investment income and current transfers.

During the fourth quarter, the surplus narrowed to $6.3 billion from a revised $8.4 billion in the third quarter. This was the result of a second consecutive quarterly drop in the surplus for trade in goods, as well as a higher deficit on investment income.

But for 2004 as a whole, the surplus reached $33.8 billion, $10.0 billion higher than 2003, as the surplus in goods hit its largest level in three years.

Both exports and imports set new records last year, helped by larger values of trade in industrial goods. While two-thirds of the increase for exports came from transactions with the United States, it accounted for only half of the variation for imports. The larger import share belonged to other countries such as China.

Investment income

Canada’s deficit on investment income last year shrank to its lowest level since 1992, as receipts grew more than payments. Both profits earned abroad by Canadians and profits on foreign direct investment in Canada rose significantly over their 2003 levels.

The nation’s travel deficit last year amounted to $4.1 billion, surpassing the 2003 deficit which was, at that time, the highest in nine years. This helped widened Canada’s overall deficit for services by about $300 million.

For more information, contact Arthur Ridgeway (613-951-8907), Balance of Payments Division.

  Print article

© 2004, 2005 Statistics Canada.