National net worth grew 9.3 per cent from a year before and 2.7 per cent from the previous quarter.
National wealth, which is the value of economy-wide non-financial assets, increased 6.7 per cent from a year earlier, although growth was slightly slower from the third quarter to the fourth quarter than it was in the preceding period.
"This reflected the easing of economic activity, partly offset by sustained price increases for selected non-financial assets," the Statistics Canada report said. "Residential real estate continued to be the major contributor to growth in national wealth, accounting for over half of the gain."
The market value of net foreign debt was more than halved to $55 billion in the fourth quarter as Canadians increased their assets abroad faster than their liabilities to non-residents, driven by the strength of investment flows as well as by the revaluation effects of sharp gains in foreign equity prices and the weaker loonie.
Household net worth increased 3.8 per cent in the fourth quarter, and although household debt continued to grow at a faster rate than personal disposable income during the period, the gains in both financial and non-financial assets in the period reduced the ratio of household debt to net worth to 17.8 per cent from 18.2 per cent in the third quarter.
Canadian households currently carry about $1.10 in mortgage and consumer credit debt for every dollar of their disposable income.
Meanwhile, corporations borrowed more money to fund increased capital investment in the fourth quarter. Debt increased in the credit markets, especially bonds, as companies borrowed more and felt the pinch from a depreciating Canadian dollar on foreign-denominated liabilities. As a result, the ratio of debt-to-equity at book value rose in the fourth quarter.
Government net debt, which equals total liabilities minus total financial assets, fell for the seventh quarter in a row as the government sector saw another surplus in the fourth quarter. Net government debt as a percentage of gross domestic product also dropped to less than half, compared to 90 per cent a decade ago.
National net worth saw faster growth in 2006, jumping 9.3 per cent in 2006 compared to the 5.7-per-cent gain in 2005. The plunge in net foreign indebtedness in the third and fourth quarters of 2006, as well as somewhat stronger growth in national wealth, contributed largely to the faster pace.
