National balance sheet accounts
National net worth increased 0.7% to $6.4 trillion in the first quarter. Growth in non-financial assets, mainly in non-residential structures, was partially offset by an increase in net foreign debt. Non-residents further increased their holdings of Canadian securities in the first quarter, with the investment split between Canadian bonds and equities. On a per capita basis, national net worth increased to $185,400 in the first quarter, up from $184,500 in the previous quarter.
Growth in household net worth slows
Household net worth advanced 1.0% to $6.3 trillion, after a 2.4% increase in the fourth quarter. This deceleration was reflected in both financial and non-financial assets. Per capita household net worth was $184,700 in the first quarter, up from $183,300 in the fourth quarter.
Note to readers
Canadian publicly traded companies began their transition to International Financial Reporting Standards (IFRS) in the first quarter of 2011. As all companies adopt the new reporting standards over the next quarters, this will have an impact on the National balance sheet accounts. For more information on some of these affects consult the article "Impact of new accounting standards on the Financial and Wealth Accounts."
The National Balance Sheet Accounts (NBSA) comprise the balance sheets of all sectors of the economy: the persons and unincorporated business (households), corporate, government, and non-resident sectors. They cover all national non-financial assets and financial claims and their associated liabilities outstanding in all sectors.
National net worth is national wealth less net foreign liabilities (that is, what is owed to non-residents less what non-residents owe to Canadians). Alternatively, it is the sum of the net worth of the persons and unincorporated business, corporate, and government sectors.
Household credit market debt comprises consumer credit, mortgage, and loan debt of households, non-profit institutions serving households, and unincorporated businesses. Corporate equity is treated as a liability on the balance sheet of the corporate sector since it represents a claim by shareholders on the corporate sector. As a result, as equity prices increase, corporate net worth will tend to decline, reflecting the increase in the corporate sector's equity liabilities.
As of the release of the NBSA for the third quarter of 2009, a number of sectors and categories that were previously published have been combined, in order to provide more relevant sector and category information.
Quarterly series, at both book and market value, are available from the first quarter of 1990. Annual market value data are published from 1970, while book value estimates remain available from 1961. Marketable securities are at market value, unless otherwise stated. For more information on the market value estimates, consult the National balance sheet estimates at market value page of our website.
The value of households' holdings of equities (including mutual funds) and pension assets continued to rise, albeit at a slower pace than the previous quarter as the increase in asset prices eased. The Standard and Poor's / Toronto Stock Exchange composite index gained 5.1% in the first quarter, which was down from the previous quarter. The growth in the value of residential real estate also slowed from the previous quarter.
The increase in household consumer credit debt slowed in the first quarter, as consumer spending on durable goods fell. Mortgage debt advanced, partly reflecting relatively stable borrowing costs as well as higher housing resale and renovation activities.
The ratio of household credit market debt to personal disposable income advanced to 147.3% in the first quarter, as growth in household credit market debt (+1.3%) outpaced that of the personal disposable income (+0.7%). The debt-service ratio also edged up in the first quarter, continuing a trend that started in the third quarter of 2010. Somewhat weaker growth in personal disposable income (as a result of temporary factors) and moderately higher borrowing, accounted for the rise in the debt-service ratio in the first quarter.
Home owners' equity as a percentage of real estate assets fell marginally, continuing the trend that started in 2010. The ratio of household credit market debt to net worth increased to 24.0%, reversing the decrease in the previous quarter.
Government net debt up slightly
Government net debt (expressed at book value) increased by $22 billion in the first quarter from $21.4 billion in the previous quarter. The ratio of net debt to gross domestic product stood at 45.8%, edging up from the previous quarter.
The increase in government debt moderated, as overall borrowing eased, mostly reflecting net redemptions of short-term paper by both federal and other levels of governments. Governments continued to finance activities, primarily in bond markets.
Corporate debt to equity edges down
Equity financing was the major source of external financing in the corporate sector while bond issuance also increased. Private non-financial corporations' total debt to equity edged down to 164.6% in the first quarter.
Equity investment of financial corporations increased
Consistent with the market gains over the first quarter, the value of investments in marketable securities, notably shares, of institutional investors such as trusteed pension plans and mutual funds increased, albeit at a slower pace than the previous quarter. Holdings of foreign investments and federal government bonds by financial institutions decreased, and their holdings of short-term paper declined markedly.
Definitions, data sources and methods: survey number 1806.
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.
The first quarter 2011 National Balance Sheet Accounts: Data Tables, Vol. 4, no. 1 (13-022-X, free), is now available from the Key resource module of our website under Publications.
Additional tables and links to other releases from the national accounts can be found in the first quarter 2011 issue of Canadian Economic Accounts Quarterly Review, Vol. 10, no. 1 (13-010-X, free). This publication is now available from the Key resource module of our website under Publications. Revised estimates of the National balance sheet accounts covering the period from 2008 to 2010 have been released along with those for the first quarter of 2011. These estimates incorporate new and revised source data and updated estimates of seasonal patterns.
Data for the second quarter will be released on September 13.
For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640; firstname.lastname@example.org), Income and Expenditure Accounts Division.
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