Canada Becomes a Creditor Nation

For the first time in at least nine decades, Canada has more assets abroad than foreigners have here. These include direct investments, stocks, foreign currency reserves and the like.

Statistics Canada reported Thursday that the country had net assets of $26.7-billion at the end of last year, up from a net liability position of $302.1-billion at the end of 2012.

Senior economist Peter Buchanan of CIBC World Markets noted that Canada has been an international debtor every year since at least 1926. It’s likely the country was in a similar position for even longer given the payments toward the massive debt to build the continental railway.

“Canada is now a net creditor to the rest of the world,” said Bank of Montreal chief economist Douglas Porter.

Mr. Porter reckons it’s the first time that’s happened in decades, and “back at least to the days when the Hudson Bay Co. was shipping beaver pelts to Europe.”

The reason for the dramatic turnaround is a combination of strong foreign stock market gains in the U.S. and elsewhere coupled with a roughly 10-per-cent decline in the Canadian dollar since mid-2013.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza