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Canada’s Balance of Payment – Deeply negative

Sorry missed this data yesterday!

The strength of the Canadian dollar continues to affect the Canadian economy.  Canada’s trade balance continues its downward trajectory into the negative…In the third quarter of 2010, our current account deficit widened to C$4.6bn, for a total of C$17.5 bn for the year.

The strength of the Canadian dollar is sucking-up foreign demand; at the same time demand for Canadian goods (non-energy) is ebbing.  This has been financed by the dramatic increase in foreign capital inflows (see here) that have been the hallmark of Canada’s economy for the past two years.



On the bright side, Canada’s Gross fixed capital formation advanced 9.4% driven by non-residential investments (+19.8%) with machinery & equipment surging 28.7%.  In a nut shell Canadian company are investing heavily to increase labor productivity.  

(Source Data:  StatsCan)

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