Canadian Personal Finance Blog

Archive for December 16th, 2006

The end of the year and the quarter means a plethora of pithy data from our amigoes at Stats Canada, and while some I really don’t care about (relative price of wire) some heartens you in a way.

Government debt continues to fall
Government net debt (total liabilities less total financial assets of all levels of government combined) declined significantly in the third quarter as it did in the second quarter, as the government sector continued to be in surplus. Net government debt (at book value) as a percentage of gross domestic product has continued its steady decline and is approaching 40%, a level not seen in decades.

Net foreign debt declines sharply
Growth in Canadian foreign assets exceeded the growth in Canadian liabilities to non-residents, more than reversing the change in position of the previous quarter during which the net Canadian international investment position had deteriorated. The pronounced decline in Canada’s net foreign debt provided a boost to the growth in national net worth in the third quarter.

It’s good to see we are lowering our net debt as a country (well our government at least). The fact that it is less in the hands of foreign banks is great too. A great deal of Canada’s debt is held by folks like me and my parents, who still have Canada Savings Bonds (CSBs), so whenever you hear folks say, “We should just default on the debt and start again”, that would wipe out a lot of our Senior Citizens savings, so it would NOT be a good idea.

This is actually a good lesson for those folks who have large debt loads and who are looking for a “quick fix”. Canada built up the National Debt over 30 years (1969 onward I think), so we are not going to be out of debt any time soon, but we are making steps in the right direction. I remember when the government couldn’t even balance the books and not add to the debt, now we are actually slowly paying it off, which is a really good thing to see. Maybe I’ll live to see Canada out of debt! –C8j