By Erik Hertzberg and Mario Baker Ramirez
(Bloomberg) — Canada’s present account deficit reached the widest on document within the second quarter because the nation’s exports to the US dropped due to the commerce dispute.
The shortfall rose to $21.16 billion within the second quarter, Statistics Canada reported Thursday. That’s the biggest since at the least the early Nineteen Eighties, and considerably deeper than the $1.32 billion deficit recorded within the first three months of this yr, when Canadian exporters benefited from U.S. corporations constructing inventories to get forward of tariffs.
The present account deficit was solely barely wider than the $19.3 billion anticipated by economists in a Bloomberg survey, however captures the key commerce disruption posed by U.S. President Donald Trump’s tariff barrage.
Canada’s items exports have dropped to 2021 ranges, the company stated, falling 13.1% within the second quarter. Canada’s commerce deficit in items widened to a document $19.6 billion, primarily as a result of a discount in shipments to the U.S., the nation’s largest buying and selling associate.
The present account is a broad measure of worldwide funds and receipts together with commerce in items and companies and different sources of earnings and investments. Massive surpluses are likely to assist currencies, whereas deficits can act as a drag.
“Not an ideal exhibiting for Canada, but it surely was clearly an distinctive quarter,” stated Benjamin Reitzes, charges and macro strategist at Financial institution of Montreal. “These flows want to show optimistic or the Canadian greenback might be in for a tough journey.”
The Canadian greenback is up about 4.5% up to now this yr in opposition to the buck, and was buying and selling at $1.377 per U.S. greenback as of 10:03 a.m. Ottawa time.
Within the U.S., inflation-adjusted gross home product elevated at a 3.3% annualized tempo, in keeping with a revised estimate from the Bureau of Financial Evaluation on Thursday.
Falling exports probably triggered the nation’s financial system to stall within the second quarter. Economists surveyed by Bloomberg see gross home product contracting at an annualized minus 0.7% tempo throughout that interval. Statistics Canada experiences GDP information by expenditure and earnings on Friday.
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Final modified: August 28, 2025
