Canada’s current account deficit narrowed by 4.6 billion Canadian dollars (about 3.5 billion U.S. dollars) in the second quarter to 8.6 billion Canadian dollars, Statistics Canada said Thursday.
On a seasonally adjusted basis, the reduction reflected a lower deficit in trade in goods and services and was moderated by a lower surplus for investment income.
The combined trade in goods and services deficit declined by 5.3 billion Canadian dollars to 7.9 billion Canadian dollars in the second quarter. Both the goods and services deficits narrowed in the quarter.
In the financial account, which is unadjusted for seasonal variation, inflows of funds from abroad to finance the current account deficit largely came from record foreign investment in Canadian debt securities.
Borrowing needs from governments increased substantially in the second quarter to support Canadian enterprises and households affected by the COVID-19 pandemic, and foreign creditors contributed strongly to these financing activities.