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National balance sheet accounts
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National net worth reached $4.7 trillion by the end of the second quarter, or $142,900 per person. The gain in net worth resulted from an increase in national wealth (economy-wide non-financial assets) which was partially offset by increased net foreign debt. The growth in national net worth slowed to 1.2% in the second quarter, less than the average of 1.6% for the previous four quarters.
Growth in national wealth was up 1.7% in the second quarter from 1.0% in the first quarter. The increase in the market value of residential real estate continued to be the major contributor to the growth in national wealth. It accounted for about two thirds of the increase in national wealth in the quarter. Increases in other non-financial assets including increased value of non-residential construction added to national wealth in the quarter.
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 persons, corporations and governments. National saving is the sum of saving of persons, corporations and governments. National saving and investment contribute to change in national net worth. The revaluation of assets and liabilities is also responsible for changes in national net worth. The causes of revaluation include changes in share prices, interest rates, exchange rates and loan allowances. Quarterly series, both book and market value, run from the first quarter of 1990; market value estimates have been available since June 2004. Additional annual market value data from 1970 to 1989 will be available upon request on September 29, 2006. In addition, expanded sector detail for the market value estimates will be available at the same time. These new data will be available on CANSIM at a later date. For more information on the market value estimates, consult the Balance sheet estimates at market value page of our website. |
Growth in household net worth stalls
Gains in household net worth stalled in the quarter, recording the lowest growth rate in seven quarters. Most notably, the stock market correction was reflected in a reduction in the value of corporate shares and mutual funds, as well as limited gains in the value of pension assets. This was only partly offset by continued advances in the value of residential real estate, with gains largely attributable to price increases.
With the continued rise in household debt, and the modest increase in net worth, households had $0.18 of debt for every dollar of net worth at the end of the second quarter, up slightly from the first quarter. Debt service charges represent about 8% of personal disposable income.
Corporate leverage eases
Growth in credit market debt of non-financial corporations slowed in the second quarter, and the ratio of debt to equity resumed its downward trend. Corporations continued to generate surplus funds on a net basis and remain a lender to the rest of the economy, a trend which began in 2000.
Government debt continues to fall
Government net debt (total liabilities less total financial assets) declined significantly in the second quarter, led by a large government sector surplus. Net government debt (at book value) as a percentage of gross domestic product has continued its steady decline to about 45%, a level not seen in more than 20 years.
Net foreign debt advances on the heels of a large decline
Growth in Canadian assets abroad was exceeded by the growth in Canadian liabilities to non-residents. This largely reflected the negative impact of the strengthening Canadian dollar on Canada's foreign assets, which exceeded the moderating impact on foreign liabilities. In addition, non-resident investment in Canada outpaced Canadian investment abroad in the quarter. As a result, Canada's net foreign debt (the amounts owing to non-residents less foreign assets held by Canadians) was up significantly in the second quarter, following a large decline at the time of the first quarter. This dampened the growth in national net worth in the second quarter.
Available on CANSIM: tables 378-0003 to 378-0010.
Definitions, data sources and methods: survey number 1806.
The second quarter 2006 issue of National Balance Sheet Accounts, Quarterly Estimates, Vol. 4, no. 2 (13-214-XIE, free) is now available from the Publications module of our website.
The second quarter 2006 issue of Canadian Economic Accounts Quarterly Review, Vol. 5, no. 2 (13-010-XIE, free), is now available from the Publications module of our website.
At 8:30 a.m. on release day, the complete national balance sheet accounts can be obtained on computer diskette. The diskettes (13-214-DDB, $321/$1,284) can also be purchased at a lower cost seven business days after the official release date (13-214-XDB, $65/$257). To purchase any of these products, contact the client services officer (613-951-3810; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.
For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640), Income and Expenditure Accounts Division.
Table(s).
