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Fixed assets

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The Daily

Friday, November 7, 2008

Expenditures on oil and gas extraction, as well as high technology, were the main contributors to the growth in fixed assets in Canada during the past decade.

Provincially, Alberta recorded the fastest growth in the share of the nation's fixed capital stock during this decade. In 1998, Alberta accounted for 16% of Canadian fixed assets. By 2008, its share had increased to 25%.

The value of machinery and equipment assets increased 49% between 1998 and 2008, over twice the rate of growth for building and engineering assets. This increase was due to investment in machinery and equipment that incorporated high technology such as computers, software and telecommunications equipment.

Investment in computers more than quadrupled, the fastest rate of growth. The value of computer assets amounted to $52.0 billion in 2008, up from $9.1 billion in 1998. The value of software assets more than doubled during the same period, while telecommunications equipment assets grew by 38%.

Engineering assets rose 22% to $612.6 billion during the past decade. Within this section, the value of oil and gas extraction assets posted the strongest increase (+62%). This situation was due to the strength of investments in the oil sands since 2005.

In total, the net value of fixed assets used to produce goods and services in the Canadian economy reached $1.7 trillion (in constant 2002 dollars) in 2008, compared with $1.3 trillion in 1998.

Reduction in industrial building stock

Investments in industrial building stock declined between 1998 and 2008 compared with the 1987 to 1997 period, and the stock of industrial buildings has declined 12% since 1998.

This situation is mainly attributable to reduced investment in plants in the manufacturing sector. In 2008, the average age of manufacturing plants was 17.7 years, compared with 16.1 years in 1998.

On the other hand, the institutional building stock increased 26% between 1998 and 2008. Schools and hospitals, which account for nearly one-third of the institutional building stock, have increased 22% since 1998.

Note to readers

The value of fixed capital stock is measured by the total value of all non-residential buildings, engineering structures and machinery and equipment.

This release of 2008 fixed assets refers to the net linear stock and includes revisions going back to 2003 to reflect the revised source data. The present release also refers to the concept of average age by asset, which is calculated using investment, the survival function, the year in which the investment was made, and year-end gross stock.

The key factor in the calculation of the average age is the amount of investment. Without sufficient investment in an asset, the stock of the asset decreases and its age increases.

The average age of institutional buildings, which peaked at 20.4 years in 1998, stood at 19.2 years in 2008, owing to strong investments since 2001.

Large increase in fixed assets in Alberta

In 1998, Alberta had $213.1 billion worth of buildings, structures and equipment in use. By 2008, this had increased by 76% to $374.0 billion, the second highest level in the country. Robust investments in Alberta's oil sands contributed considerably to the growth of fixed assets in Alberta.

Ontario had the nation's largest level of fixed capital stock ($537.2 billion) in 2008, up 18% from 1998. Nevertheless, this growth was tempered by a decline in fixed assets in Ontario's manufacturing sector, especially the automotive sector.

Quebec, which formerly had the second largest stock of fixed capital in Canada, ranked third behind Alberta and Ontario in 2008.

Quebec's stock stood at $311.1 billion in 2008, up 13% from 1998. The decline of assets in its manufacturing sector also tempered the overall growth in Quebec during this period.

Proportionally, Quebec and Ontario registered the largest declines in their shares of Canada's fixed capital stock. Quebec's share declined from 21% in 1998 to 17% in 2008, while Ontario's share dropped from 35% to 31%.

Available on CANSIM: tables 031-0002 to 031-0004.

Definitions, data sources and methods: survey number 2820.

To order data, contact Flo Magmanlac (613-951-2765). For more information, or to enquire about the concepts, methods or data quality of this release, contact Mychèle Gagnon (613-951-0994), Investment and Capital Stock Division.

Tables. Table(s).