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  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
  • Canada-China FTA will leave workers worse off June 2, 2017
    Global Affairs Canada is currently consulting Canadians on a possible Canada-China free trade agreement. In CCPA’s submission to this process, CCPA senior researcher Scott Sinclair argues that an FTA based on Canada’s standard template would almost certainly reinforce rather than improve upon Canada’s imbalanced and deleterious trade with China. It can also be expected to […]
    Canadian Centre for Policy Alternatives
  • Faulty assumptions about pipelines and tidewater access May 30, 2017
    The federal and Alberta governments and the oil industry argue that pipelines to tidewater will unlock new markets where Canadian oil can command a better price than in the US, where the majority of Canadian oil is currently exported. Both governments have approved Kinder Morgan's Trans Mountain Expansion Project, but a new report finds that […]
    Canadian Centre for Policy Alternatives
  • Weathering the storm: is this the end of CRA’s political activities audits? May 5, 2017
    Yesterday, following a panel’s recommendation to allow charities more freedom to speak out, the federal government decided to suspend the Canada Revenue Agency’s controversial political activities audit program. Indeed this is good news for Canadian charities. Everyone at the CCPA is proud of the role our organization has played in challenging these audits and in […]
    Canadian Centre for Policy Alternatives
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Statistics Canada Resuscitates Dead Money

Interestingly, the day after the new Bank of Canada Governor gave a speech distancing himself from his predecessor’s “dead money” comments, Statistics Canada released a significant downward revision to the usual measure of corporate cash accumulation.

The cash holdings of private non-financial corporations reached $594 billion in the fourth quarter of 2012, so I was curious to see if they would crack $600 billion in the first quarter of this year. To my surprise, today’s National Balance Sheet Accounts indicate a corporate cash hoard of “only” $535 billion in the fourth quarter and $544 billion in the first quarter.

I phoned Statistics Canada’s Income and Expenditure Accounts Division, which confirmed that it had revised “Total currency and deposits”. Specifically, it stopped including covered bonds in this category.

It is a judgement call which near-cash instruments to count as cash. Statistics Canada’s decision is consistent with Basel III standards, which do not consider covered bonds to be tier-one capital (although Danish lobbyists seem to have won an exception).

My first conclusion is that this redefinition does not fundamentally change the story of Canadian corporate cash hoarding. The revised numbers still show a sharp rise in corporate cash holdings over time. Even using the narrower definition of “cash,” Canada’s private non-financial corporations are still sitting on more than half a trillion dollars of it.

My second conclusion is that corporate Canada has recently poured an awful lot of money into covered bonds. The difference between the old and revised figures was $59 billion for the fourth quarter of 2012. By comparison, it was only $13 billion for the first quarter of 2012.

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Comment from eric pineault
Time: June 27, 2013, 6:29 pm

So corporate Canada is making money off household debt as well as by selling stuff…
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/bank-of-canadas-lane-warns-of-impact-of-banks-mortgage-securitization-moves/article12830770/

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