This paper reports annual carbon (C) balance of Canada's forests during 1895--1896 estimated using the Integrated Terrestrial Ecosystem C-budget model (InTEC) <Chen et al., this issue>. During 1895--1910, Canada's forests were small sources of 30¿15 Tg C yr-1 due to large disturbances (forest fire, insect-induced mortality, and harvest) in late nineteenth century. The forests became large sinks of 170¿85 Tg C yr-1 during 1930--1970, owing to forest regrowth in previously disturbed areas and growth stimulation by nondisturbance factors such as climate, atmospheric CO2 concentration, and N deposition. In recent decades (1980--1996), Canada's forests have been moderate sinks of 50¿25 Tg C yr-1, as a result of a madeoff between the negative effects of increased disturbances and positive effects of nondisturbance factors. The nondisturbance factors, in order of importance, are (1) atmospheric N deposition (measured by a national monitoring network), (2) net N mineralization and fixation (estimated from temperature and precipitation records), (3) growing season length increase (estimated from spring air temperature records), and (4) CO2 fertilization (estimated from CO2 records using a leaf-level photosynthesis model). The magnitudes of modeled nondisturbance effects are consistent with simulation results by the Carnegie-Ames-Stanford Approach (CASA) and are also in broad agreement with flux measurements above mature forest stands at several locations in Canada. Results for the disturbance effects agree with a previous study <Kurz and Apps, 1996>. The overall C balance from InTEC generally agrees with that derived from tree ring data <Auclair and Bedford, 1997> and from forest inventories. The combination of our result and that of Houghton et al. <1999> for the United States suggests that North America (>15 ¿N) was probably a C sink of 0.2--0.5 Pg C yr-1 during 1980s, much less than that of 1.7 Pg C yr-1 estimated by Fan et al. <1998> using an atmospheric inversion method. ¿ 2000 American Geophysical Union