Fixed assets

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Canada's national wealth in net fixed assets—as measured by the total value of all its non residential buildings, engineering structures and machinery and equipment—increased by 22% between 1997 and 2007, largely the result of strong investment by the nation's mining and oil and gas extraction industries.

By the end of 2007, the net value of the buildings, structures and equipment used to produce goods and services in the economy will reach $1.6 trillion (in constant 2002 dollars) compared with $1.3 trillion in 1997. This is an increase in the pace of growth compared with the 10-year period between 1987 and 1997, when net fixed assets grew by 15%.

Two-thirds of this total consists of building and engineering structures, while one-third consists of machinery and equipment. The value of machinery and equipment assets rose 40%, more than twice the pace of building and engineering assets, which increased only 15%.

Strong growth in high tech

Investments in machinery and equipment grew between 1997 and 2007. It is particularly important for Canadian industries to acquire machinery and equipment that incorporates the latest technology because it helps them to withstand foreign competition.

Between 1997 and 2007, Canadian industries invested heavily in high technology, such as computers, software and telecommunications equipment. High-tech made up 22% of total machinery and equipment assets in 2007, compared with about 17% in 1997. Service industries, including public administrations, were the main contributors to the increase in high-tech stock.

Investments in computers have risen steadily since 1989. In the past 10 years, computer assets increased eight-fold, from $6.5 billion in 1997 to $53.4 billion in 2007, while software assets nearly doubled to $37.4 billion. Growth in telecommunications equipment was a more modest 20%.

Engineering assets increased by 19%. Oil and gas engineering assets led the growth, with a 68% increase since 1997.

In the engineering infrastructure categories such as transportation, waterworks and sewage engineering, the increase in the stock was modest. Waterworks engineering assets posted a 16% increase, followed by transportation engineering assets with a 5% gain. The stock of highways and roads, with the biggest weight in this category, rose by only 5% between 1997 and 2007, while the stock of bridges and overpasses declined by 6%. Sewage engineering assets declined 9%.

Among the various categories of buildings, institutional building stock increased 25% during the 10-year period, while the stock of commercial buildings rose 10%. The stock of industrial buildings declined 11%.

Four industries account for more than half the value of assets

Four industries alone account for more than half of the value of Canada's fixed assets: mining and oil and gas extraction; public administration; utilities and manufacturing. The two major contributors to the growth in fixed assets from 1997 to 2007 were the mining and oil and gas extraction industries and the public administration sector. However, declines in fixed assets among utilities and manufacturing industries had a dampening effect on that growth.

Capital stock for the mining and oil and gas extraction sector will reach $256.0 billion by the end of 2007, 16% of the total and the largest share. Since 2004, strong investments in Alberta's oil sands led to a considerable increase in the fixed assets of the mining and oil and gas extraction industries.

Capital stock in the public administration sector is worth an estimated $221.1 billion, about 14% of the total Canadian stock. Municipal governments were responsible for the increase in fixed assets during the last 10 years, as those of the federal and provincial governments declined.

Fixed assets in the utilities area will be worth an estimated $214.8 billion at the end of 2007, or just under 14% of the total. Fixed assets in utilities have been declining since 1997 because of the drop in the stock of the electric power industries. The increase in investments for this industry was insufficient to counterbalance the depreciation of the assets.

In manufacturing, capital stock is worth an estimated $160.0 billion, or 10% of the total. The strength of the Canadian dollar could have led to an increase in the imports of new technologies in the manufacturing sector. However, fluctuations in international demand and increased foreign competition have resulted in a modest increase in investments and job cuts in this sector. Manufacturers' investments in building and engineering structures started declining in 2001. At the end of 2007, the stock will be 21% below its 1997 level. Fixed assets in manufacturing machinery and equipment have declined 4% over the last 10 years.

Alberta expands its share of national wealth

Alberta was the only province to see an increase in its share of national wealth during the 10-year period. In 1997, Alberta had $203.3 billion worth of buildings, structures and equipment in use. By 2007, this had increased 70% to $345.6 billion.

In 2007, Alberta accounted for 22% of the total value of fixed assets, up from 16% in 1997. A major factor in the increase was booming investment in the oil and gas extraction industry, where investments in Alberta have more than doubled since 1997. That prosperity has also spread to other sectors, and the majority of industries have enjoyed steady investment growth since 2003.

Ontario and Quebec recorded the largest declines in their shares of national wealth over the last 10 years, while the shares of other provinces and the territories edged down, or remained unchanged. Quebec's share slipped from 21% in 1997 to 19% in 2007, while Ontario's share edged down from 35% to 33%.

Ontario's fixed capital stock, the largest in Canada, increased 15% from 1997 and was valued at $517.2 billion in 2007. However, Ontario's large manufacturing sector, which has experienced difficulties in recent years, slowed the growth. Fixed assets in this sector, which accounts for 14% of the stock in Ontario, have decreased since 1997 because total investment fell short of their depreciation.

In Quebec, fixed assets were valued at $299.5 billion in 2007, up 9% from 1997. Despite higher stocks in the utilities and government services sectors, growth in Quebec was dampened by a decline in assets such as industrial buildings and machinery the in the manufacturing sector during the 10-year period.

Available on CANSIM: table 031-0002.

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) or Michel Labonté (613-951-9690), Investment and Capital Stock Division.

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