National balance sheet and financial flow accounts, third quarter 2012

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National net worth and wealth

National net worth increased by over $9 billion to $6.8 trillion in the third quarter, translating to $194,100 on a per capita basis. In addition to higher prices for many assets, national saving and revaluations contributed to increased national wealth. National saving reflected sustained saving by the corporate sector.

The increase in Canada's net foreign indebtedness dampened the gain in national net worth in the third quarter. Higher net foreign debt was largely a result of increased Canadian borrowing from abroad and a decrease in the value of Canadian investment abroad denominated in foreign currency, the latter reflecting the appreciation in the Canadian dollar.

Chart 1 
National net worth
Chart 1: National net worth

Chart description: National net worth

CSV version of chart 1

The resulting rise in national net worth was largely attributable to higher values of non-financial assets in the third quarter. National wealth advanced almost $63 billion to $7.1 trillion at the end of the third quarter, an increase of 0.9% compared with the 1.3% advance in the previous quarter. Housing investment slowed during the quarter but residential real estate still contributed materially to the increase in national wealth.

Sector analysis

Household sector

New household borrowing was $27.3 billion in the third quarter. Mortgages increased $18.4 billion to $1.1 trillion, albeit increasing at a slower pace than in the previous quarter. Consumer credit levels reached $474 billion in the third quarter versus $467 billion in the second quarter.

Chart 2 
Household borrowing
Chart 2: Household borrowing

Chart description: Household borrowing

CSV version of chart 2

Owner's equity as a percentage of real estate edged down to 69.0% in the third quarter, as mortgage debt increased relatively more than the value of real estate. Leverage as measured by household credit market debt to disposable income, increased from 163.3% in the second quarter to 164.6% in the third quarter, a smaller quarterly increase than seen in the previous quarter.

Household net worth was up 1.0% in the third quarter, led by gains in the values of equity holdings (including mutual funds) and pension assets. The increase in equities reflected a 6.2% rise in the Standard and Poor's / Toronto Stock Exchange composite index in the quarter, rebounding from a 6.4% decrease in the previous quarter. The value of household real estate increased $24 billion in the third quarter. On a per capita basis, household net worth rose to $197,800 in the third quarter, from $196,400 in the previous quarter.


Total government net debt (expressed at book value) rose to $865.8 billion in the third quarter from $847.9 billion in the second quarter. The ratio of total government net debt to gross domestic product (GDP) continued to trend upward, increasing slightly from 47.3% in the second quarter to 48.0% in the third quarter.

Non-financial corporations

Slowing demand for funds by private non-financial corporations in the quarter was reflected in reduced borrowing via debt instruments while share issuance increased. On a book value basis, corporations had about 54 cents of credit market debt for every dollar of equity in the third quarter, a decline from the second quarter. Leverage has been trending downward for corporations since the early 1990s, related to a trend towards increased undistributed corporate profits.

Chart 3 
Non-financial corporate debt-to-equity ratio
Chart 3: Non-financial corporate debt-to-equity ratio

Chart description: Non-financial corporate debt-to-equity ratio

CSV version of chart 3

Non-financial corporation gross saving outpaced non-financial capital acquisition in the third quarter. The corporate sector remained a net lender to the rest of the economy, mainly reflecting continued strong internally-generated funds (undistributed corporate profits).

Institutional investors

Financial institutions saw their financial assets increase in value to $9.2 trillion, a quarterly increase in excess of $200 billion. More than a third of this increase was from the gain in the value of equities, reflecting the turnaround in the Toronto Stock Exchange in the third quarter. The downward revaluation of foreign currency denominated investments, resulting from the appreciation of the Canadian dollar, dampened the growth in financial assets.

Funds raised on financial markets and credit market debt

Total funds raised by domestic non-financial sectors on financial markets amounted to $62.5 billion in the third quarter. Households continued to account for the largest share of the private sector demand for funds, a trend that emerged in 2004. The overall government sector demand for funds was lower, led by non-federal levels of government.

Credit market debt (consumer credit, mortgages, loans, short-term paper and bonds) of domestic non-financial sectors totaled $4.0 trillion in the third quarter, up 1.4% from the previous quarter. Combined bonds and mortgage debt outstanding reached $2.7 trillion, accounting for more than two-thirds of total non-financial sector credit market debt outstanding.

Note to readers

This release is a combined analysis of the National balance sheet accounts and Financial flow accounts. Both sets of data are available today, a departure from past practice where they were released separately. The National balance sheet accounts comprise the balance sheets of all sectors and sub-sectors of the economy. The main sectors are households, non-profit institutions serving households, financial corporations, non-financial corporations, government, and non-residents. They cover all national non-financial assets and financial asset-liability claims outstanding in all sectors.

The Financial flow accounts (FFA) measure net lending or borrowing by examining financial transactions in the economy by sector. 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 issuance 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) with the underlying financial transactions.

Definitions concerning financial indicators can be found in Financial indicators from the National Balance Sheet Accounts.

For a more detailed description of the 2012 Historical Revision, consult Revisions analysis - National Balance Sheet Account 2012.

For more information, contact the information officer (

Available without charge in CANSIM: tables CANSIM table378-0119 to 378-0125.

Definitions, data sources and methods: survey numbers survey number1804 and survey number1806.

The National economic accounts module, accessible from the Key resource module of our website, features an up-to-date portrait of national and provincial economies and their structure.

Links to other releases from the national accounts can be found in the third quarter 2012 issue of Canadian Economic Accounts Quarterly Review, Vol. 11, no. 3 (Catalogue number13-010-X, free). This publication is now available from the Key resource module of our website under Publications. Revised National balance sheet accounts for the first and second quarters of 2012 have been released, along with those for the third quarter of 2012. These data incorporate new and revised source data and updated data.

Periodically, the Canadian economic accounts undergo historical revisions, which are much broader in scope than the regular revisions undertaken on an annual basis. These are reserved for incorporating conceptual, classification, presentational and major statistical changes. This release of the Financial flow accounts incorporates such revisions back to 1990.

For more information, refer to the Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X, free). This publication is now available from the Key resource module of our website under Publications.

Data on Financial flow accounts and National balance sheet accounts for the fourth quarter will be released on March 15, 2013.

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; or Media Relations (613-951-4636;