Goods Trade Drives the Improvement
Canada's goods trade balance showed one of the biggest changes in the latest data.
The balance moved from a $6.4 billion deficit in Q1 to a $12.2 billion surplus in Q2.
Statistics Canada said this was Canada's largest goods surplus since the third quarter of 2008. (Statistics Canada)
The improvement came as exports increased much faster than imports during the quarter.
Goods Exports Hit a Record
Canadian goods exports increased 13.1% to $232.1 billion in the second quarter.
That was a new quarterly record, well above the previous record of $209.0 billion recorded in the first quarter of 2025.
Energy products were the biggest contributor to the increase, although exports across most product sections also rose during the quarter. (Statistics Canada)
Energy Exports Lead the Growth
Energy products played a major role in Canada's stronger export performance.
Energy exports increased 27.4% during the second quarter, with crude oil and bitumen making a particularly large contribution.
Exports of crude oil and bitumen reached a record $44.8 billion. Total energy product exports also reached a record $60.6 billion. (Statistics Canada)
Statistics Canada linked the increase partly to higher prices amid international production and supply uncertainty.
Imports Also Reached a Record
Canada's goods imports increased during the quarter, but the increase was smaller than the rise in exports.
Imports climbed 3.9% to $220.0 billion, also reaching a record level.
Chemical products, electronic and electrical equipment, and motor vehicles and parts were among the categories that recorded higher imports during the quarter. (Statistics Canada)
The slower increase in imports compared with exports helped push the overall goods trade balance further into surplus.
Auto Exports Add to the Improvement
Motor vehicles and parts also contributed to the increase in Canadian exports.
Exports in the category rose 19.3% in the second quarter as Canadian auto production increased.
However, Statistics Canada noted that exports of motor vehicles and parts remained below their quarterly average levels recorded in 2023 and 2024. (Statistics Canada)
That means the overall improvement in exports was driven by several areas, with energy remaining the largest contributor.
Services Tell a Different Story
The services side of Canada's international account did not strengthen in the same way as goods.
Canada's international trade in services surplus narrowed from $472.1 million in Q1 to $26.3 million in Q2.
Services imports increased 1.7% to $62.0 billion, while services exports rose 1.0% to the same level. (Statistics Canada)
The smaller services surplus partly offset the stronger performance in goods.
Foreign Investors Bought More Canadian Bonds
The latest figures also show a significant increase in foreign investment in Canadian securities.
Foreign investors increased their holdings of Canadian securities by $100.6 billion during the second quarter.
Foreign investment in Canadian debt securities reached $110.2 billion, the highest level on record. Foreign purchases of Canadian government bonds accounted for $80.8 billion of that total. (Statistics Canada)
At the same time, foreign investors reduced their holdings of Canadian shares by $9.6 billion for a second consecutive quarter.
Canadians Continued Buying Foreign Securities
Canadian investors also continued investing outside the country.
Canadian investment in foreign securities reached $45.6 billion in the second quarter.
Purchases of foreign shares accounted for $35.5 billion, with U.S. equity securities making up $37.8 billion of those purchases.
Canadian investors also added $10.0 billion in foreign debt securities to their portfolios during the quarter. (Statistics Canada)
Why This Matters for Canada
The current account surplus provides another look at Canada's economic relationship with the rest of the world.
The latest improvement was driven mainly by stronger goods exports, especially energy products.
At the same time, the data show that Canada's international position is not moving in one direction across every category. The services surplus narrowed, while investment flows also changed significantly during the quarter.
For Canadians, the figures highlight the continued importance of exports, energy and international investment to the country's economy.
What the Latest Numbers Show
The second-quarter figures present a stronger trade picture than the previous quarter.
Canada recorded a large goods surplus, exports reached a record level and the current account moved into its first surplus since 2022.
However, the latest data should be considered alongside other economic indicators. GDP, employment, inflation and household spending can provide additional information about the overall health of Canada's economy.
What Happens Next?
Statistics Canada will continue tracking Canada's trade and international investment position through the rest of 2026.
The next balance of international payments release, covering the third quarter, is scheduled for November 27, 2026. (Statistics Canada)
The Q2 figures nevertheless provide a notable snapshot of Canada's international position, with exports and energy products playing a major role in the move from deficit to surplus.
TwikUp Insight
Canada's current account has made a sharp move from an $8.3 billion deficit to an $8.8 billion surplus, giving the country its largest current account surplus since 2005.
The biggest driver was goods trade. Canadian goods exports reached a record $232.1 billion, with energy products accounting for a large part of the increase.
The broader picture is more mixed. Services moved close to balance, foreign investors increased their purchases of Canadian debt securities, and Canadian investors continued buying foreign assets.
For Canadians, the latest data underline how strongly Canada's international economic position can be influenced by exports, energy prices and global investment flows.
