Foreign investors hold almost 50% of federal bonds as Canada's external debt hits $5 trillion
Canada's net foreign asset position climbed $619.2bn in the second quarter to $1.95tn, the largest quarterly increase on record.
Statistics Canada reported the gain followed two consecutive quarters of decline, with the upward revaluation driven by market price changes and, to a lesser extent, by exchange rate movements.
Market price changes added $495.8bn to the net position, a contribution Statistics Canada described as unprecedented in its release.
The Japanese stock market appreciated 37.2 percent over the quarter, the US stock market rose 14.9 percent, and the European stock market gained 13.6 percent, according to Statistics Canada, against a 6.4 percent advance for the Canadian stock market.
Equities make up 69.8 percent of Canada's international assets and 49.3 percent of its liabilities, the agency reported.
Exchange rate fluctuations added $123.7bn.
The Canadian dollar depreciated 2.0 percent against the British pound, 1.9 percent against the US dollar, and 0.9 percent against the euro over the quarter, and edged up 0.2 percent against the Japanese yen.
Statistics Canada reported that 97.1 percent of Canada's international assets were denominated in foreign currencies at quarter-end, including 66.7 percent in US dollars, compared with 35.8 percent of liabilities, of which 25.9 percent were in US dollars.
Canada's net foreign asset position with the United States rose $418.5bn to $1.67tn, per the agency's figures, and the position with the rest of the world increased $200.7bn to $277.7bn.
International assets rose $1,093.4bn to $12.39tn, the largest quarterly gain on record.
Statistics Canada attributed $723.8bn of that to market price revaluation, $174.8bn to exchange rate effects, and $157.3bn to acquisitions of foreign assets.
International liabilities reached $10.44tn, up $474.2bn from the previous quarter.
Market price revaluation accounted for $228.0bn of the increase, foreign borrowing activity for $145.6bn, and exchange rate movements for $51.1bn.
Foreign acquisitions of government bonds hit an unprecedented level during the quarter.
The foreign-held share of total outstanding federal government bonds has risen from a low of 27.0 percent in the first quarter of 2021 to 44.6 percent in the second quarter of 2026.
Gross external debt, the value of Canadian debt instruments held by foreign investors, reached $5.05tn at quarter-end, an increase of $204.1bn.
Statistics Canada put the figure at 146.9 percent of gross domestic product, up from 145.6 percent in the previous quarter.
The government sector's gross external debt grew $98.5bn to $1.05tn, double its level in the first quarter of 2020 at the onset of the COVID-19 pandemic.
The financial sector's external debt rose $88.3bn to $2.98tn, a fourth consecutive quarterly increase, and accounted for 59.0 percent of the national total at the end of June.
Canada's net position fell $310.8bn in the first quarter to $1,360.5bn, its lowest level since the third quarter of 2023 and down from $1,825.0bn at the end of September 2025, Statistics Canada reported in its first-quarter release.
Canada's current account moved from a deficit of $8.3bn in the first quarter to a surplus of $8.8bn in the second on a seasonally adjusted basis, Statistics Canada reported in its August 27 balance of payments release.
The surplus was the first since the second quarter of 2022 and the largest since the fourth quarter of 2005, led by energy products within a broad rise in goods exports.
Writing in The Hub, Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, argued the swing reflects a commodity windfall, saying "Canada is a commodity-exporting country, and right now commodities are ripping."
