U.S. equities boost Canada’s foreign assets: StatsCan

Resilient U.S. stock markets helped boost Canada’s net investment position in the second quarter, according to data from Statistics Canada.

International asset growth surpassed liability growth in the second quarter — assets rose 2.7%, while liabilities were up 0.8% in the quarter. That pushed Canada’s net foreign asset balance up by $241.3 billion to $1.26 trillion, the national statistical agency reported.

“For a third consecutive quarter, the increase was led by significant market price gains on the strength of U.S. equity markets,” StatsCan said. U.S. markets gained 8.3% in the quarter, while Canadian markets were essentially flat.

The market gains were somewhat offset by shifting exchange rates, as the Canadian dollar gained 2.2% against the U.S. dollar in the quarter, it noted.

Additionally, StatsCan reported that Canada’s gross external debt increased by $50.3 billion in the second quarter to $3.65 trillion.

“The growth was largely in short-term instruments, those with an original maturity of less than one year,” it said, noting that the financial sector drove the increase (accounting for $40.1 billion in external debt).

External debt as a percentage of GDP rose to 129.3% in the second quarter, up from 128.4% in the previous quarter, StatsCan said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.