National balance sheet and financial flow accounts, third quarter 2024
Released: 2024-12-12
$19.0 trillion
Third quarter 2024
-0.7% 
(quarterly change)
$30.1 billion
Third quarter 2024
$5.4 billion 
(quarterly change)
$17.3 trillion
Third quarter 2024
1.7%
(quarterly change)
14.72%
Third quarter 2024
-0.26
(quarterly change)
Household net worth buoyed by strong financial markets despite lower real estate values
Households were wealthier in the third quarter of 2024 as their net worth—the value of all assets minus all liabilities—increased $287.7 billion (+1.7%) to $17,287.1 billion. This marked the seventh increase in household net worth in the last eight quarters, a period during which household wealth increased by nearly $1.9 trillion.
Average net worth per household was steady at just over $1 million in the third quarter. However, household net worth is not evenly distributed across all wealth quintiles. For instance, the gap in wealth between the wealthiest (top 20% of the wealth distribution) and the least wealthy (bottom 40% of the wealth distribution) increased to 64.9 percentage points in the second quarter of 2024, up 0.4 percentage points from the second quarter of 2023.
Overall, households' financial assets increased 3.9% (+$400.0 billion) in the third quarter of 2024 to reach a record high ($10,637.1 billion), as domestic equity markets rebounded following a weak second quarter. This was the fourth consecutive quarter where households' financial assets reached a new record high. After losing footing in the second quarter, the S&P/TSX Composite Index rose 9.7% in the third quarter, outperforming the S&P 500 Index (+5.5%).
Households holding domestic or foreign equities, either directly or through other investment products such as funds, benefited from higher asset valuations. However, 71.6% of financial assets were held by the highest wealth quintile in the second quarter of 2024 and so recent financial gains may widen the wealth gap further.
Partly offsetting the rise in financial assets, the value of non-financial assets declined 0.8% (-$75.4 billion) to $9,693.5 billion, pulled lower by a decline in the value of residential real estate (-$88.1 billion). Also weighing against overall asset gains, household financial liabilities, composed primarily of mortgage and non-mortgage debt, increased $36.9 billion (+1.2%) in the third quarter.
Household saving rate rises as investment activities grow and deposits slow
The household saving rate (seasonally adjusted) rose to a three-year high of 7.1% in the third quarter of 2024, up from 6.2% in the second quarter, as gains in disposable income grew (+2.3%) at nearly double the rate of consumption (+1.2%).
Amid higher savings, households increased their purchases of mutual fund shares, which totalled $26.9 billion in the third quarter, the highest since the first quarter of 2022 and up from $14.7 billion in the second quarter of 2024. This was the fourth consecutive quarter of net investment in mutual fund shares, totalling $66.3 billion since the fourth quarter of 2023. Inflows into non-money market funds accelerated while inflows into money market funds slowed in the third quarter of 2024, reflecting a greater preference for risk assets as interest rates declined. At the same time, households added $7.7 billion in Canadian currency and deposit assets, less than half the pace of the second quarter and the smallest addition since the first quarter of 2021.
Highlights
During the third quarter of 2024, the Canadian economy grew 0.3% in real terms (seasonally adjusted), a slower rate than the second quarter. The increase was driven by higher government and household spending, although moderated by lower spending on machinery and equipment and declining exports.
In Canada, the policy interest rate was 4.25% at the end of the third quarter; the Bank of Canada announced 25 basis point reductions on both July 24 and September 4. Household credit market borrowing rose in the third quarter, driven by both non-mortgage and mortgage borrowing. At the same time, notable growth in household disposable incomes alleviated some of the financial pressure tied to aggregate household leverage and debt servicing. According to the Canadian Survey of Consumer Expectations, many respondents indicated there would need to be a significant decrease in interest rates for them to consider buying a home in the next 12 months.
The performance of Canadian equity markets overtook that of their American counterparts for the first time since early 2022 with the Canadian real estate, financials, and utilities sectors performing well in the third quarter of 2024. The value of domestic bonds rose across all maturities, as yields, particularly at the short end of the curve, fell.
The value of residential real estate declined in the third quarter, although real estate activity picked up on a seasonally adjusted basis and ownership transfer costs rose. Federal government credit market borrowing increased after a slower second quarter. Canada's net foreign asset position continued to expand in the third quarter, albeit at a slower rate than the second quarter, as both equity and fixed income markets rose, impacting both sides of Canada's balance sheet vis-à-vis the rest of the world.
Residential real estate declines despite uptick in sales activity
The value of household residential real estate fell 1.0% to $8,305.1 billion in the third quarter as home prices softened; this was the second consecutive quarter in which household real estate declined in value. However, residential real estate holdings still represented 40.9% of households' total assets in the third quarter with nearly three-quarters of household real estate held by those aged 45 years and older.
The average resale price fell 5.2% in the third quarter compared to the second quarter to end at roughly $667,000. Despite this price decline and following a relatively muted market in spring and early summer, the housing market began to gain momentum as seasonally adjusted resale activity accelerated in August and September. This activity, on the heels of falling mortgage rates, continued to grow through the end of the third quarter into October.
One indicator of housing affordability is the value of household real estate as a proportion of disposable income. In the third quarter, this ratio fell to 505.7%, the lowest point since the end of 2020 when it was 495.8% and well off its peak of 630.0% in the first quarter of 2022.
Seasonally adjusted household credit market borrowing bounces back
In the third quarter of 2024, the pace of household credit market borrowing (seasonally adjusted) reached $30.1 billion, an acceleration from the second quarter when borrowing stood at $24.7 billion. The pace for both mortgage loans and non-mortgage loans was greater than the second quarter, while the $21.4 billion in mortgage borrowing represented the greatest demand for mortgages since the third quarter of 2022.
Household borrowing pushed the seasonally adjusted stock of household credit market debt (consumer credit, and mortgage and non-mortgage loans) 1.0% higher to reach $2,993.1 billion in the third quarter of 2024.
Chart 1
Household credit market debt, seasonally adjusted flows
Households' debt burden relative to their income continued to improve, as the ratio of household credit market debt as a proportion of household disposable income fell for a sixth consecutive quarter, declining to 173.1% in the third quarter, where it stood 11.0 percentage points below the first quarter of 2023. In other words, there was $1.73 in credit market debt for every dollar of household disposable income. The persistent decline in household leverage was largely due to a notable rise in disposable income that surpassed the growth in credit liabilities.
Decline in household debt service ratio accelerates
Chart 2
Household credit market debt to household disposable income, seasonally adjusted
Chart 3
Household debt service ratio
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—decreased from 14.98% in the second quarter of 2024 to 14.72% in the third quarter, as debt payments (+0.2%) grew at a sluggish pace compared to disposable income (+2.0%). Both the mortgage and non-mortgage components of the debt service ratio declined in the third quarter of 2024.
Federal government bond issuance increases
The federal government's demand for funds—defined as the net issuance of treasuries and bonds and new borrowing less repayments of loans—was $25.4 billion in the third quarter of 2024, up from $9.3 billion in the second quarter. This brought the federal government's demand for funds over the last four quarters to $104.4 billion compared with $41.2 billion over the four quarters prior. Unlike the first half of 2024, nearly all net issuances of federal government debt in the third quarter were in the form of bonds (+$24.9 billion). Demand for federal government bonds was led by non-residents, who purchased $19.5 billion in the third quarter, while recording a net redemption of federal treasury bills (-$4.5 billion).
Chart 4
Government net financial liabilities as a percentage of gross domestic product
The federal government's net financial liabilities as a share of gross domestic product (GDP) fell to 32.4% in the third quarter, a decrease of 0.4 percentage points. This decline was the result of an increase in federal government assets which outpaced growth in liabilities. As a result, net financial liabilities grew at a slower pace than nominal GDP.
Private non-financial corporations' demand for funds edges down
Private non-financial corporations' demand for funds was $35.6 billion in the third quarter of 2024. Borrowing was mainly in the form of net bond issuances (+$20.2 billion) and non-mortgage loans (+$11.4 billion). This followed a larger demand for funds of $39.5 billion in the second quarter and more constrained borrowing of $7.2 billion in the first quarter.
In the third quarter, listed share redemptions (-$4.5 billion) continued for the 11th consecutive quarter, led by the energy industry. Across the board, redemptions continued to exceed issuances, partially owing to a general decline in initial public offerings (IPOs) in Canadian equity markets.
Chart 5
Demand for funds by private non-financial corporations
Chart 6
Domestic demand for funds by instrument
Meanwhile, the ratio of private non-financial corporation credit market debt to GDP edged higher to 72.01% in the third quarter as the nominal value of credit market debt outpaced aggregate economic growth. Overall credit market debt for private non-financial corporations stood at $2,182.7 billion at the end of the third quarter. This sector continues to face more challenging borrowing costs as the effective rate of interest expense relative to their interest-bearing liabilities rose to 4.16% (annual rates) in the third quarter despite recent rate cuts.
National net worth declines for a second consecutive quarter
Chart 7
Change in national net worth by component
National net worth, the sum of national wealth and Canada's net foreign asset position, fell 0.7% in the third quarter of 2024 to $18,954.3 billion. The total value of non-financial assets in Canada, also referred to as national wealth, dipped 0.8% in the third quarter to $17,089.0 billion, as the value of residential real estate and natural resources slumped. At the same time, Canada's international investment position recorded a fourth consecutive gain to reach $1,865.3 billion in the third quarter, but this amounted to a modest rise of $11.6 billion that only partially offset the downturn in Canada's national wealth.
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Note to readers
Revisions
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 this release of the national balance sheet and financial flow accounts for the third quarter of 2024, data were revised back to 2020 to incorporate improvements and ensure a continuous time series. These data incorporate new and revised data, as well as updated data on seasonal trends.
Details on these revisions are available in "An overview of the revisions to the Financial and Wealth Accounts, 2020 to 2024."
General
Unless otherwise stated, growth rates represent the percentage change in the series from one quarter to the next; for instance, from the second quarter to the third quarter of 2024.
Unless otherwise stated, distributional information from the Distributions of Household Economic Accounts program is from the previous quarter. For this third quarter release of the national balance sheet and financial flow accounts, that would be 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 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 of 2020 to the third quarter of 2024.
Accounting for First Nations settlements
As of this release, the national balance sheet and financial flow accounts have been revised to account for the Robinson Huron Treaty settlement agreement in the first quarter of 2024. A transfer of funds in the form of current transfers from the federal government and the Ontario provincial government to Indigenous governments, which include the 21 Robinson Huron Treaty First Nations, has been recorded. These funds may subsequently be disbursed to individual members of the 21 First Nations or used collectively. Further impacts on Indigenous governments' net worth will be determined when additional information is available.
Next release
Data on the national balance sheet and financial flow accounts for the fourth quarter of 2024 will be released on March 13, 2025.
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 the revisions to the Financial and Wealth Accounts, 2020 to 2024," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is now 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 now 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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