The Globe on Corporate Cash Hoards
Todayâ€™s Globe and Mail (page B15) mentions the PEF in a story on the corporate sectorâ€™s record-breaking accumulation of cash, a subject about which we have often blogged.
Corporate Canada has tripled its cash stash in each of the last two decades. The following Statistics Canada figures are â€œCanadian currency and depositsâ€ plus â€œForeign currency and depositsâ€ for private non-financial corporations:
Second quarter of 1991: $54 billion
Second quarter of 2001: $157 billion
Second quarter of 2011: $477 billion
A policy implication of corporations stockpiling their incremental cash is that yet more no-strings-attached corporate tax cuts are unlikely to translate into higher investment.