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National balance sheet accounts
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Though down slightly from the previous quarter, growth in national net worth remained robust, mainly as a result of steady gains in non-financial assets. National net worth (total assets less liabilities) grew 1.2% or $68 billion in the first quarter of 2008. This resulted in a per capita national net worth of $171,000, up from $169,300 at the end of 2007.
National wealth, defined as the sum of economy-wide non-financial assets, rose to $5.7 trillion at the end the first quarter of 2008. This was a modest increase of 1.2% compared with the 2.3% advance registered for the same quarter of last year. Although housing investment cooled during the quarter, residential real estate remained a major contributor to the increase in national wealth, accounting for over one-third of the gain.
Sustained saving by both the corporate and government sectors remained a driving force behind the gains in national net worth. Canada's net foreign indebtedness (with marketable securities on a market value basis) has trended downwards over the last number of years, although it edged up in the first quarter, primarily due to a stock market correction on Canadian portfolio investments abroad. However, this small increase was offset by the widening of Canada's net foreign direct investment asset position, as well as by the depreciation in the Canadian dollar, which raised the value of Canadian foreign security holdings. As a result, the gain in national net worth was only marginally constrained by the increase in Canada's net foreign debt.
Note to readersThe national balance sheet accounts are statements of the balance sheets of all of the various sectors of the economy. They consist of the non-financial assets owned in the various sectors of the economy and of financial claims outstanding. National wealth is the sum of non-financial assets (produced assets, land surrounding structures and agricultural land) in all sectors of the economy. National net worth is national wealth less net foreign liabilities (i.e., what is owed to non-residents less what non-residents owe to Canadians). Alternatively, it is the sum of the net worth of the persons and unincorporated business, corporate and government sectors. National saving is the sum of saving of the persons and unincorporated business, corporate and government sectors. National saving and investment contribute to change in national net worth. The revaluation of assets and liabilities also contributes to changes in national net worth. The causes of revaluation include changes in non-financial asset prices, equity prices, interest rates, exchange rates and loan allowances. Quarterly series, both book and market value, are available from the first quarter of 1990. For more information on the market value estimates, consult the Balance sheet estimates at market value page of our website. With this release, data are revised from 2004 through 2007. Annual estimates of pension assets by type from 1990 to 2007 are available as an extension to the National Balance Sheet Accounts. For more information on the market value estimates, consult the Preliminary results of the Pension Satellite Account. |
Household net worth expands
Household net worth expanded by 0.4% in the first quarter, as increases in financial and non-financial assets outpaced growth in liabilities. Growth in life insurance and pension assets offset the decline in equities, the latter resulting from a decline in the financial stock markets.
Despite declines in new housing construction and resale markets in the first quarter, residential real estate continued to expand, though at a reduced pace. The value of residential real estate further buttressed the growth in non-financial assets.
Household debt (consumer credit and mortgage liabilities) continued to grow faster than net worth in the first quarter of 2008. Households had 19.6 cents of debt for every dollar of net worth, and household debt amounted to 123.8% of personal disposable income.
Non-financial corporate debt and leverage largely unchanged
Increased reliance on borrowed funds in the first quarter was reflected in a marginal increase in leverage. Corporations had about 54 cents of debt for every dollar of equity in the first quarter. However, leverage has been trending downward for corporations since the early 1990s, partially spurred by the trend to increased undistributed corporate profits.
The corporate sector remained a net lender to the rest of the economy, as corporations continued to generate more funds (undistributed corporate profits) from internal operations. Non-financial corporations' surplus advanced, as gross saving outpaced non-financial capital acquisition.
Asset growth of financial institutions accelerates
In aggregate, financial institutions significantly increased financial assets in the first quarter, principally reflecting increases in corporate claims and mortgage holdings. The upward revaluation of foreign currency denominated investments, resulting from the depreciating dollar, also contributed to the growth in financial assets.
Government net debt continues to decline in relation to gross domestic product
As a percentage of gross domestic product (GDP) government net debt further declined, representing about 40% of GDP compared with 90% in 1996.
Available on CANSIM: tables 378-0003 to 378-0010.
Definitions, data sources and methods: survey number 1806.
The first quarter 2008 issue of National Balance Sheet Accounts, Quarterly Estimates, Vol. 6, no. 1 (13-214-XWE, free) is now available from the Publications module of our website.
The first quarter 2008 issue of Canadian Economic Accounts Quarterly Review, Vol. 7, no. 1 (13-010-XWE, free), is now available from the Publications module of our website.
The complete quarterly National Balance Sheet Accounts: Data Tables, first quarter 2008, no. 1 (13-022-XWE, free) are also now available from the Publications module of our website.
For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640, iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.
Table(s).
