Erik Hertzberg and Mario Baker Ramirez
((Bloomberg) – Canada’s current account deficit reached the widest record in the second quarter as the country’s exports to the United States fell due to trade disputes.
Statistics Canada reported on Thursday that the shortage in the second quarter rose to $2.16 billion in the second quarter. It was the largest since at least the early 1980s and was much deeper than the $1.32 billion deficit recorded in the first three months of the year, when Canadian exporters benefited from U.S. companies that benefited from stocks that built inventory to raise tariffs.
The current account deficit is only slightly wider than the $19.3 billion expected by economists in the Bloomberg survey, but captures a major trade disruption caused by tariff violations by U.S. President Donald Trump.
The agency said Canadian commodity exports had fallen to 2021 and fell 13.1% in the second quarter. Canada’s trade deficit on goods widened to a record $19.6 billion, mainly due to the reduction in goods from the country’s largest trading partner.
Current accounts are a broad measure of international payments and receipts, including trade in goods and services, as well as other sources of income and investment. Large surpluses tend to support currency, while deficits can act as resistance.
“It’s not a great quarter for Canada,” said Benjamin Reitzes of the Bank of Bank of Montreal. “These traffic needs to become positive or the Canadian dollar may have a tough journey.”
The Canadian dollar has grown by about 4.5% against the Greenback so far this year, and as of 10:03 a.m. Ottawa time, the trading price per dollar was $1.377.
In the U.S., inflation-adjusted GDP grew by 3.3%, according to a revised estimate by the Bureau of Economic Analysis on Thursday.
A decline in exports could cause the country’s economy to stall in the second quarter. Economists surveyed by Bloomberg saw GDP shrinking to 0.7% annually during the period. Statistics Canada reported GDP data through spending and income on Friday.
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Last modified: August 28, 2025
