diff --git a/hledger-lib/Hledger/Data/Journal.hs b/hledger-lib/Hledger/Data/Journal.hs
index f260a8d5b..8149d9b6c 100644
--- a/hledger-lib/Hledger/Data/Journal.hs
+++ b/hledger-lib/Hledger/Data/Journal.hs
@@ -245,7 +245,7 @@ journalConcat :: Journal -> Journal -> Journal
 journalConcat j1 j2 =
   let
     f1 = takeFileName $ journalFilePath j1
-    f2 = maybe "(unknown)" takeFileName $ headMay $ jincludefilestack j2  -- XXX more accurate than journalFilePath for some reason
+    f2 = maybe "(unknown)" takeFileName $ fmap fst $ headMay $ jincludefilestack j2  -- XXX more accurate than journalFilePath for some reason
   in
     dbgJournalAcctDeclOrder ("journalConcat: " <> f1 <> " <> " <> f2 <> ", acct decls renumbered: ") $
     journalRenumberAccountDeclarations $
diff --git a/hledger-lib/Hledger/Data/Types.hs b/hledger-lib/Hledger/Data/Types.hs
index 80725316b..b954d307f 100644
--- a/hledger-lib/Hledger/Data/Types.hs
+++ b/hledger-lib/Hledger/Data/Types.hs
@@ -633,8 +633,8 @@ data Journal = Journal {
   ,jparsealiases            :: [AccountAlias]                         -- ^ the current account name aliases in effect, specified by alias directives (& options ?)
   -- ,jparsetransactioncount :: Integer                               -- ^ the current count of transactions parsed so far (only journal format txns, currently)
   ,jparsetimeclockentries   :: [TimeclockEntry]                       -- ^ timeclock sessions which have not been clocked out
-  ,jincludefilestack        :: [FilePath]
-  -- principal data
+  ,jincludefilestack        :: [(FilePath, FilePath)]                 -- ^ (absolute path, canonical path) of included files, most recent first
+-- principal data
   ,jdeclaredpayees          :: [(Payee,PayeeDeclarationInfo)]         -- ^ Payees declared by payee directives, in parse order.
   ,jdeclaredtags            :: [(TagName,TagDeclarationInfo)]         -- ^ Tags declared by tag directives, in parse order.
   ,jdeclaredaccounts        :: [(AccountName,AccountDeclarationInfo)] -- ^ Accounts declared by account directives, in parse order.
diff --git a/hledger-lib/Hledger/Read/Common.hs b/hledger-lib/Hledger/Read/Common.hs
index 651a2c4d9..856e29203 100644
--- a/hledger-lib/Hledger/Read/Common.hs
+++ b/hledger-lib/Hledger/Read/Common.hs
@@ -151,6 +151,7 @@ import Data.Time.Calendar (Day, fromGregorianValid, toGregorian)
 import Data.Time.Clock.POSIX (getPOSIXTime)
 import Data.Time.LocalTime (LocalTime(..), TimeOfDay(..))
 import Data.Word (Word8)
+import System.Directory (canonicalizePath)
 import System.FilePath (takeFileName)
 import System.IO (Handle)
 import Text.Megaparsec
@@ -314,11 +315,12 @@ parseAndFinaliseJournal parser iopts f txt =
 -- Timeclock and Timedot files.
 initialiseAndParseJournal :: ErroringJournalParser IO ParsedJournal -> InputOpts
                           -> FilePath -> Text -> ExceptT String IO Journal
-initialiseAndParseJournal parser iopts f txt =
-    prettyParseErrors $ runParserT (evalStateT parser initJournal) f txt
+initialiseAndParseJournal parser iopts f txt = do
+    cf <- liftIO $ canonicalizePath f
+    prettyParseErrors $ runParserT (evalStateT parser (initJournal cf)) f txt
   where
     y = first3 . toGregorian $ _ioDay iopts
-    initJournal = nulljournal{jparsedefaultyear = Just y, jincludefilestack = [f]}
+    initJournal cf = nulljournal{jparsedefaultyear = Just y, jincludefilestack = [(f, cf)]}
     -- Flatten parse errors and final parse errors, and output each as a pretty String.
     prettyParseErrors :: ExceptT FinalParseError IO (Either (ParseErrorBundle Text HledgerParseErrorData) a)
                       -> ExceptT String IO a
diff --git a/hledger-lib/Hledger/Read/JournalReader.hs b/hledger-lib/Hledger/Read/JournalReader.hs
index 9ee975d99..e2cdab6cf 100644
--- a/hledger-lib/Hledger/Read/JournalReader.hs
+++ b/hledger-lib/Hledger/Read/JournalReader.hs
@@ -410,12 +410,11 @@ includedirectivep iopts = do
 
       -- Throw an error if one of these files is among the grandparent files, forming a cycle.
       -- Though, ignore the immediate parent file for convenience. XXX inconsistent - should it ignore all cyclic includes ?
-      -- We used to store the canonical paths, then switched to non-canonical paths for more useful output,
-      -- which means for each include directive we must re-canonicalise everything here; noticeable ? XXX
+      -- Use canonical paths for cycle detection, show nominal absolute paths in error messages.
       parentj <- get
       let parentfiles = jincludefilestack parentj
-      cparentfiles <- liftIO $ mapM canonicalizePath parentfiles
-      let cparentf = take 1 parentfiles
+          cparentfiles = map snd parentfiles
+          cparentf = take 1 cparentfiles
       files2 <- forM files $ \f -> do
         cf <- liftIO $ canonicalizePath f
         if
@@ -442,8 +441,9 @@ includedirectivep iopts = do
 
       -- Read the file's content, or throw an error
       childInput <- lift $ readFilePortably filepath & handleIOError off "failed to read a file"
+      cfilepath <- liftIO $ canonicalizePath filepath
       parentj <- get
-      let initChildj = newJournalWithParseStateFrom filepath parentj
+      let initChildj = newJournalWithParseStateFrom filepath cfilepath parentj
 
       -- Choose a reader based on the file path prefix or file extension,
       -- defaulting to JournalReader. Duplicating readJournal a bit here.
@@ -470,14 +470,14 @@ includedirectivep iopts = do
 
           where
             childfilename = takeFileName filepath
-            parentfilename = maybe "(unknown)" takeFileName $ headMay $ jincludefilestack parentj  -- XXX more accurate than journalFilePath for some reason
+            parentfilename = maybe "(unknown)" takeFileName $ fmap fst $ headMay $ jincludefilestack parentj  -- XXX more accurate than journalFilePath for some reason
 
       -- And update the current parse state.
       put parentj'
 
       where
-        newJournalWithParseStateFrom :: FilePath -> Journal -> Journal
-        newJournalWithParseStateFrom filepath j = nulljournal{
+        newJournalWithParseStateFrom :: FilePath -> FilePath -> Journal -> Journal
+        newJournalWithParseStateFrom filepath cfilepath j = nulljournal{
           jparsedefaultyear      = jparsedefaultyear j
           ,jparsedefaultcommodity = jparsedefaultcommodity j
           ,jparseparentaccounts   = jparseparentaccounts j
@@ -486,7 +486,7 @@ includedirectivep iopts = do
           ,jdeclaredcommodities           = jdeclaredcommodities j
           -- ,jparsetransactioncount = jparsetransactioncount j
           ,jparsetimeclockentries = jparsetimeclockentries j
-          ,jincludefilestack      = filepath : jincludefilestack j
+          ,jincludefilestack      = (filepath, cfilepath) : jincludefilestack j
           }
 
 -- Get the absolute path of the file referenced by this parse position.