Canada’s net foreign liabilities, the difference between what Canadians own abroad and what foreigners own here, rose to their highest quarterly level of 2005 in the last quarter, Statistics Canada said today.

Net external liabilities reached $175.8 billion at the end of the fourth quarter, up 1.6% from the third quarter.

However, on a year-over-year basis, net external liabilities were down 2.9% compared with the $181.1 billion recorded at the end of 2004.

It was the third straight year-end decline of net external liabilities.

Canadian holdings abroad were just over $1 trillion in the last quarter, up $5 billion from the third quarter.

Meanwhile, liabilities increased $7.9 billion to $1.18 trillion.

For 2005 as a whole, foreign liabilities rose $43.7 billion, nearly three-quarters of because of higher direct investment in Canada. At the same time, Canadian assets abroad rose by $49 billion, almost half of it coming from increased purchases of foreign bonds.

Net external liabilities at the end of December represented 12.5% of GDP, unchanged from the end of the third quarter, but somewhat lower than the ratio of 13.7% recorded at the end of 2004.