National balance sheet and financial flow accounts, second quarter 2024
Released: 2024-09-12
$19.4 trillion
Second quarter 2024
1.6% 
(quarterly change)
$25.1 billion
Second quarter 2024
-$2.4 billion 
(quarterly change)
$17.0 trillion
Second quarter 2024
0.2%
(quarterly change)
14.97%
Second quarter 2024
0.08
(quarterly change)
Household net worth inches higher as housing and financial markets moderate
Households were slightly wealthier in the second quarter than they were in the first quarter, as their net worth—the value of all assets minus all liabilities—edged up $42.4 billion (+0.2%) to $17,007.6 billion. Despite slowing financial markets and a softening housing market, the value of household total assets surpassed $20 trillion for the first time in the second quarter.
Overall, households' financial assets increased 0.9% (+$94.0 billion) in the second quarter to reach a record high ($10,116.3 billion) for the third consecutive quarter, despite weaker domestic equity markets. Following two consecutive quarters of significant growth, the S&P 500 Index grew a more modest 3.9% in the second quarter, while the S&P/TSX Composite Index shed 1.3%. The value of non-financial assets edged down 0.1% to $9,901.3 billion (-$6.2 billion), fuelled by a decline in the value of residential real estate (-$12.1 billion). Weighing against asset gains, household financial liabilities, composed primarily of mortgage and non-mortgage debt, increased $45.4 billion (+1.5%), the largest increase since the third quarter of 2022.
Average net worth per household remained steady at just over $1 million in the second quarter of 2024. However, household net worth is not evenly distributed across all wealth quintiles, as most wealth is held by relatively few households in Canada. In the first quarter of 2024, the wealthiest (top 20% of the wealth distribution) households accounted for more than two-thirds (67.6%) of household wealth, averaging $3.4 million per household, while the least wealthy (bottom 40% of the wealth distribution) accounted for 2.8%, averaging $70,356.
Household saving rate rises
The household saving rate (seasonally adjusted) increased to 7.2% in the second quarter, as gains in disposable income outweighed increases in nominal consumption expenditure. A portion of these savings likely bolstered holdings of currency and deposits, as households added $25.9 billion in the second quarter.
Highlights
During the second quarter of 2024, the Canadian economy grew 0.5% in real terms (seasonally adjusted), a similar pace as in the first quarter. The increase was driven by higher government expenditure, business investment and household spending on services, which was moderated by decreases in exports, residential construction, and household spending on goods. Businesses surveyed by the Canadian Survey on Business Conditions continued to be optimistic regarding their future outlook despite identifying inflation, rising cost of inputs and difficulty recruiting skilled employees as the most challenging obstacles.
On June 5, the policy interest rate was cut to 4.75% from 5.00% after remaining unchanged for six consecutive interest rate announcements. After the second quarter, two additional 25 basis point cuts were announced on July 24 and September 4, bringing the policy rate to 4.25%. Given the timing of the June rate cut and the gradual nature of interest rate changes, the announcement did not significantly impact second quarter borrowing. Household credit market borrowing fell slightly, despite an uptick in household mortgage borrowing. According to the Canadian Survey of Consumer Expectations, consumers anticipated higher inflation on services to persist while signalling that higher inflation had left them worse off compared to recent interest rate increases. Consumer expectations of inflation and interest rates also led a majority to plan for reduced future spending in response to these financial challenges.
Many major foreign equity markets rose in the second quarter, while Canadian equity markets declined. The value of domestic bonds edged up slightly, as short-term bond yields declined, while long-term bond yields rose on the heels of the June rate cut. The value of residential real estate was essentially flat as real estate activity declined on a seasonally adjusted basis. Federal government credit market borrowing slowed considerably after an active first quarter. Canada's net foreign asset position continued to increase in the second quarter, primarily due to the divergence in the performance of Canadian versus foreign equity markets.
Residential real estate edges lower on weak spring housing market
Residential real estate, a mainstay of household wealth, accounted for nearly 43% of the value of total household assets in the second quarter. However, while real estate sales activity (i.e., the number of existing homes sold) was well above the first quarter (+40.3%), the current quarter marked the weakest second quarter of real estate sales activity in four years. Correspondingly, the value of household residential real estate edged down 0.1% in the second quarter, having declined in three out of the last four quarters. Compared with the second quarter of 2023, sales in the second quarter of 2024 declined 4.7% as both the price (-2.4%) and quantity (-2.3%) of resale transactions fell. Year over year, the value of residential real estate dropped by 0.3%. Similarly, according to Statistics Canada's New Housing Price Index, the price of new housing in Canada declined 0.2% since the second quarter of 2023.
Seasonally adjusted household credit market borrowing eases
In the second quarter of 2024, the pace of household credit market borrowing (seasonally adjusted) slowed slightly to $25.1 billion, the fourth consecutive quarter of elevated demand for funds. The decline in borrowing was the result of a slowdown in consumer credit lending, falling from $7.8 billion in the first quarter to $4.0 billion in the second quarter. Mortgage borrowing reached $18.3 billion in the second quarter, a slight acceleration from the first quarter ($17.3 billion).
Chart 1
Household credit market debt, seasonally adjusted flows
The seasonally adjusted stock of household credit market debt (consumer credit, and mortgage and non-mortgage loans) grew 0.8% from the first quarter to reach $2,966.5 billion in the second quarter. As of the second quarter, households had an average debt level of $176,525, with mortgage debt ($2,201.1 billion) accounting for nearly three-quarters of the total outstanding debt.
Household credit market debt as a proportion of household disposable income fell for the fifth consecutive quarter, dropping to 175.5% in the second quarter. In other words, there was $1.76 in credit market debt for every dollar of household disposable income. Since the first quarter of 2023, total credit market debt has increased 4.3% while household disposable income has jumped 8.5%; this excess income growth relative to the expansion of debt has shaved seven percentage points from this debt-to-income ratio over the same period.
Chart 2
Household credit market debt to household disposable income, seasonally adjusted
Household debt service ratio rises on a seasonally adjusted basis
The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, increased from 14.89% at the end of the first quarter of 2024 to 14.97% at the end of the second quarter as debt payments (+2.3%) grew at a faster clip than disposable income (+1.8%). Meanwhile, the mortgage-only debt service ratio stood at a record high of 8.18% in the second quarter, up from 8.07% in the first quarter, while the Bank of Canada announced the first policy rate cut since 2020.
Chart 3
Household debt service ratio
Federal government borrowing decreases following exceptional events
Federal government demand for funds fell to $8.9 billion in the second quarter of 2024 from $47.9 billion in the first quarter. A significant portion of borrowing during the first quarter was tied to a substantial one-time payment made as part of the final settlement agreement for First Nations Child and Family Services, as borrowing through bonds and treasury bills increased. The lower borrowing in the second quarter was due to $6.3 billion in net redemptions of federal government bonds, following $31.3 billion of net issuances in the first quarter. In the second quarter, the federal government recorded $15.2 billion in net issuances of treasury bills, a similar pace to the first quarter (+$15.3 billion).
The Bank of Canada continued its policy of quantitative tightening, allowing $30.6 billion in federal government bonds to mature without replacement in the second quarter.
Federal government net financial liabilities as a share of gross domestic product (GDP) was flat at 32.8%, while net financial liabilities of other levels of government decreased to 16.3% in the second quarter from 17.1% in the first quarter.
Chart 4
Government net financial liabilities as a percentage of gross domestic product
Private non-financial corporations' demand for funds rebounds
Private non-financial corporations' demand for funds rebounded in the second quarter to $20.1 billion. The increase was mainly attributable to continued bond issuance (+$18.7 billion), mortgage borrowing (+$7.9 billion), and a resumption of non-mortgage loan borrowing (+$1.5 billion) following the Canada Emergency Business Account (CEBA) loan repayment deadline in the first quarter that contributed to reduced non-mortgage loan liabilities (-$21.5 billion).
Listed share redemptions (-$10.7 billion) continued for the 10th consecutive quarter, amidst a flurry of foreign direct investment in Canada, which saw several domestically listed companies delisted after acquisition by non-residents in the second quarter.
The ratio of private non-financial corporation debt (market value) to GDP increased slightly in the second quarter, after two consecutive quarters of deleveraging, as growth in liabilities outpaced growth in GDP. The effective interest cost of private non-financial corporations' interest-bearing debt reached 4.00% (at annual rates) in the second quarter. This was the highest effective rate since the end of 2013.
Chart 5
Demand for funds by private non-financial corporations
Chart 6
Domestic demand for funds by instrument
National net worth continues to climb
National net worth, the sum of national wealth and Canada's net foreign asset position, increased 1.6% in the second quarter of 2024 to reach $19,353.7 billion as both national wealth (+$212.5 billion) and the international investment position (+$88.6 billion) rose. The total value of non-financial assets in Canada, also referred to as national wealth, was up 1.2% in the second quarter to $17,291.3 billion, buoyed primarily by an increase in the value of natural resources. Although the value of land was essentially unchanged, other natural resources, consisting primarily of energy and mineral reserves and timber, increased in value by 9.8%.
Chart 7
Change in national net worth by component
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Note to readers
Revisions
This release of the national balance sheet and financial flow accounts for the second quarter of 2024, includes updated estimates for the first quarter of 2024. These data incorporate new data, as well as updated data on seasonal trends.
Data enhancements to the national balance sheet and financial flow accounts, such as the development of detailed counterparty information by sector, will be incorporated on an ongoing basis. To facilitate this initiative as well as others, it is necessary to extend the annual revision period (normally the previous three years) at the time of the third quarter release. Consequently, with the third quarter release of the financial and wealth accounts, data may be updated back to 1990 to ensure a continuous time series.
Details on the revisions made in the third quarter of 2023 are available in "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023."
General
Unless otherwise stated, growth rates represent the percentage change in the series from one quarter to the next—for instance, from the first quarter to the second quarter of 2024.
Unless otherwise stated, this release presents data unadjusted for seasonality.
Support measures by governments
Details on some of the more significant federal government COVID-19 pandemic support measures are now available in table 36-10-0687: Federal government COVID-19 support measures in the System of Macroeconomic Accounts, quarterly.
Financial and wealth accounts on a from-whom-to-whom basis: Selected financial instruments
The data visualization product "Financial accounts on a from-whom-to-whom basis, selected financial instruments" has been updated with data from the first quarter to the second quarter of 2024.
Accounting for First Nations settlements
During the first quarter of 2024, the Government of Canada announced the final settlement agreement on compensation and agreement-in-principle for long-term reform of First Nations Child and Family Services and Jordan's Principle. As of this release, the national balance sheet and financial flow accounts have been updated to account for the initial creation of a fiduciary trust in the first quarter from which payments will flow to households as settlement claims are processed. The initial payment has been recorded as a capital transfer from the federal government to the financial corporations' sector with the settlement funds held in trust. These funds will be disbursed to claimants over subsequent quarters with payments shown as current transfers from financial corporations to households along with corresponding impacts on household disposable income, saving and wealth.
Next release
Data on the national balance sheet and financial flow accounts for the third quarter will be released on December 12.
Overview of the financial and wealth accounts
This release of the financial and wealth accounts comprises the national balance sheet accounts (NBSA), the financial flow accounts (FFA), and the other changes in assets account.
The NBSA are composed of the balance sheets of all sectors and subsectors of the economy. The main sectors are households, non-profit institutions serving households, financial corporations, non-financial corporations, government, and non-residents. The NBSA cover all national non-financial assets and all financial asset-liability claims outstanding in all sectors. To improve the interpretability of financial flows data, selected household borrowing series are available on a seasonally adjusted basis (table 38-10-0238-01). All other data are unadjusted for seasonal variation. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
The FFA articulate net lending or borrowing activity by sector by measuring financial transactions in the economy. The FFA arrive at a measure of net financial investment, which is the difference between transactions in financial assets and liabilities (for example, net purchases of securities less net issuances of securities). The FFA also provide the link between financial and non-financial activity in the economy, which ties estimates of saving and non-financial capital acquisition (for example, investment in new housing) to the underlying financial transactions.
While the FFA record changes in financial assets and liabilities between opening and closing balance sheets that are associated with transactions during the accounting period, the value of assets and liabilities held by an institution can also change for other reasons. These other types of changes, referred to as other economic flows, are recorded in the other changes in assets account.
There are two main components to this account. One is the other changes in the volume of assets account. This account includes changes in non-financial and financial assets and liabilities relating to the economic appearance and disappearance of assets, the effects of external events such as wars or catastrophes on the value of assets, and changes in the classification and structure of assets. The other main component is the revaluation account, showing holding gains or losses accruing to the owners of non-financial and financial assets and liabilities during the accounting period as a result of changes in market price valuations.
At present, only the aggregate other change in assets is available within the Canadian System of Macroeconomic Accounts; no details are available on the different components.
Definitions concerning financial indicators can be found in "Financial indicators from the National Balance Sheet Accounts" and in the Canadian System of Macroeconomic Accounts glossary.
Distributions of household economic accounts
The NBSA for the household sector is allocated across a number of socioeconomic dimensions as part of the distributions of household economic accounts. Data on wealth and its components by income quintile, age group, generation and region are available in tables 36-10-0585-01, 36-10-0586-01, 36-10-0589-01, and 36-10-0590-01.
The methodology for Distributions of household economic accounts wealth estimates can be found in the article "Distributions of Household Economic Accounts, estimates of asset, liability and net worth distributions, 2010 to 2023, technical methodology and quality report."
Products
The document, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is available.
The data visualization product "Financial accounts on a from-whom-to-whom basis, selected financial instruments," which is part of Statistics Canada – Data Visualization Products (71-607-X), is available.
As a complement to this release, you can also consult the data visualization product "Distributions of Household Economic Accounts, Wealth: Interactive tool," which is part of Statistics Canada – Data Visualization Products (71-607-X).
As a complement to this release, you can also consult the data visualization product "Securities statistics," which is part of Statistics Canada – Data Visualization Products (71-607-X).
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
The Canada: Economic and Financial Data - International Monetary Fund's Special Data Dissemination Standard Plus product (13-608-X), "Other Financial Corporations Survey," also known as "Assets and liabilities of other financial corporations by sector, market value, quarterly" (table 36-10-0668-01), are available.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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