At The Mercy of Foreigners!!!

in deficit, Government

This is one of the battle cries I have heard talking about Canada’s National Debt and how we soon won’t be able to have control over our own destiny, as the Federal Government’s Creditors will start dictating to us about fiscal policy, Bunk! I say to that.

As usual the media gets it a little wrong. While the above rant may have some grain of truth with our soon to be turkey stuffed friends down south, in Canada that is not true at all. In fact Canada is really quite good figuring out who(m) is holding the Federal Government’s Debt.

International Comparison of Non-Resident Holdings of Central Government Debt

A very interesting graphic, which explains where some folks seem to get it wrong. Yes, our friends in the U.S. have a high degree of non-residents holding the Federal Debt (more than 2 times as much as Canada). It’s more interesting to see that Australia has such a high level of foreign investment.

Have a read of the document that is linked to the graphic (i.e. click on the graphic), if you are curious about exactly who, what, where and how the Federal debt works. Interesting stuff.

{ 4 comments }

  • Bet Crooks November 27, 2013, 11:55 AM

    It is interesting to see visually that some countries are reducing the amount of debt they have that is controlled by non-residents while Canada and the US are letting it increase.

    In fact, it looks like Canada has allowed it to increase substantially in just 3 years? I could be mis-reading but it looks like we’ve allowed about a 40% increase in the amount of debt not held by Canadians?

    Does that just reflect foreign investors turning to Cdn and US government-issued securities as “safe” investments?

    Reply
    • bigcajunman November 27, 2013, 1:28 PM

      The US Dollar has always been thought of as a “safe haven” for money (although maybe not these days), Canada might be picking up some of that as well.

      Reply
  • Robert M November 27, 2013, 7:00 AM

    BCM,

    I had to check the original document regarding the graphic, as it confused me. I assumed that it referred to who owned canadian debt, but it is who owns each goverments debt externally.

    The source for 2011-2012 is listed as various websites, which begs the question as to the accuracy of the data. An example of the dumbing down of Stats Can by the Tories.

    Good early morning test….

    cheers,

    Reply
    • bigcajunman November 27, 2013, 8:21 AM

      And it is each FEDERAL government as well (who knows who owns the Provincial debts). There is also a breakdown of what Bonds are held externally and it seems the debt is relatively short term (i.e. less than 1 year, 1-3 years and even 3-10 year bonds, but nothing above that).

      Are we in danger of Beijing telling us what to do fiscally? I don’t think so, but I am also open to discussions on this too.

      Reply

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