The Globe on Corporate Cash Hoards

Today’s Globe and Mail (page B15) mentions the PEF in a story on the corporate sector’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 “Canadian currency and deposits” plus “Foreign currency and deposits” 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.