Breaking News from The Globe and Mail

Friday, December 16, 2005

OTTAWA — The country's net worth reached $4.4-trillion at the end of the third quarter, valuing Canadians' net worth at $135,500 per capita, Statistics Canada reported Friday.

The figure measuring the net non-financial assets held by Canadians was up 0.7 per cent for the period, but was less than half the pace set in the second quarter and down from its average of 1.5 per cent growth over the past 10 quarters.

The gain resulted from an increase in national wealth, offset by an increase in net foreign debt.

National wealth, the total of non-financial assets in all sectors of the economy, grew 1.3 per cent during the quarter, Statistics Canada said.

“While residential real estate continued to be a main contributor to growth in national wealth, increases in machinery and equipment and non-residential structures were significant contributors in this quarter as well,” according to the agency.

Canadians' net indebtedness to non-residents — the amounts owing to non-residents minus foreign assets held by Canadians — increased in the quarter after three quarters of decline.

Household net worth grew by 2.3 per cent in the third consecutive quarter of growth, driven by equities and residential real estate and despite a personal saving rate below zero in the quarter.

“Stock market advances in Canada boosted the value of personal sector share holdings, investment fund units and pension assets,” Statistics Canada said.

“These gains were moderated somewhat by the impact of the appreciation of the Canadian dollar on the holdings of U.S. dollar-denominated securities held by pension funds and other institutional investors.”

An upswing in the value of residential real estate, driven by housing prices and low interest rates, was a major driver in the increase in household net worth.

The growth in total household debt continued to outpace personal disposable income, resulting in a debt-to-income ratio of 108 per cent in the quarter, up from 107.8 per cent in the second quarter.

Government net debt edged down as the government sector registered another surplus in the quarter. Net government debt as a percentage of gross domestic product reached 20-year lows, with net debt at roughly half of GDP.

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