Canada’s net foreign asset position decreased by $106.8 billion in the second quarter of 2016 (Q2 2016) to $149.0 billion, the second consecutive quarter of significant decline, Statistics Canada announced on Wednesday.
Growth in Canada’s international liabilities exceeded that of international assets, resulting in a decrease in Canada’s net foreign asset position.
In the first half of 2016, Canada’s net asset position fell by $336.0 billion, following a record high at the end of 2015.
“The stronger performance of the Canadian stock market relative to most major foreign stock markets was the main contributor to the decrease in the net foreign asset position in the second quarter,” StatsCan says in a news release.
“Net borrowing from abroad to finance an ongoing current account deficit as well as the downward revaluation effect of the appreciation of the Canadian dollar against most major foreign currencies also contributed to the decline,” StatsCan adds.
The Canadian dollar rose 0.5% against the U.S. dollar, 8.5% against the British pound and 3.1% against the euro, during Q2 2016.
The report also shows that Canada’s exposure to U.S. assets continued to increase in Q2 2016, representing 55% of all international assets at the end of June, compared with 47% five years ago.
“Over that period, U.S. equity prices, as measured by the Standard and Poor’s 500, rose 58.9%, while the Canadian dollar lost 25.3% against the U.S. dollar,” StatsCan says.