National balance sheet accounts

National balance sheet accounts note to readers

First quarter 2007

National net worth reached $5.3 trillion by the end of the first quarter, or $159,900 per capita. National net worth expanded by $134 billion (+2.6%) in the first quarter, a pace just under that of the two previous quarters.

Chart H.1 Growth in national net worth driven by real estate

The growth in national wealth (economy-wide non-financial assets) accelerated to 2.3%. This reflected the stronger economic growth in the quarter as well as price increases for some non-financial assets. Residential real estate continued to be the major contributor to growth in national wealth, accounting for about half of the gain.

The advance in national net worth continued to be supported by the decline in Canadians' net foreign indebtedness (with marketable securities on a market value basis). Growth in Canadian assets abroad, particularly portfolio investments, exceeded the rise in liabilities of Canadians to non-residents.

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Household net worth continues to grow

Household net worth increased 2.3% in the first quarter, down from the strong growth in the fourth quarter. Gains in the value of equities made up about half of the increase in the value of financial assets, supported by continued growth in the values of residential real estate. The Toronto stock exchange closed in March at a quarterly historical high, with the S&P Toronto stock exchange composite index reaching just above the 13,100 mark.

The value of residential real estate continued to expand, providing the bulk of the increase in non-financial assets. This reflected the relative size of residential real estate among household assets along with a pick up in housing prices and resale markets in the first quarter.

Households continued to build up mortgage and consumer credit debt. Household debt continued to outpace growth in personal disposable income. However, the gains in both financial and non-financial assets in the first quarter reduced the ratio of household debt to net worth to 17.5%, down from 17.6% in the fourth quarter.

Chart H.2 Household leverage continues to ease

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Corporate debt and leverage edge up

With reduced undistributed earnings, corporate demand for borrowed funds increased in the first quarter. Increases in credit market debt by private non-financial corporations matched gains in equity such that leverage (at book value) marginally increased in the first quarter.

The ratio of government net debt to gross domestic product continues to fall

The surplus of all levels of government increased for the second consecutive quarter, and with increases in financial assets more than offsetting increases in financial liabilities, government net debt (total liabilities less total financial assets) fell for a 12th consecutive quarter. Net government debt as a percentage of gross domestic product (GDP) declined further, representing less than half of GDP, compared with almost 90% a decade ago.

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Statistical tables

• Table H.1 National balance sheet accounts
• Table H.2 National balance sheet, market value
• Table H.3 Credit market summary table

Information on methods and data quality available in the Integrated Meta Data Base: 1806.