Last week’s National Balance Sheet Accounts indicate that the amount of cash held by private non-financial corporations in Canada soared from $591 billion in the third quarter of 2013 to $626 billion in the fourth quarter of 2013. Corporate Canada’s accumulated stock of cash now exceeds the federal government’s accumulated deficit, which was $612 billion at the end of 2013.
Corporate Canada’s cash stash had been on track to exceed $600 billion at the start of 2013, but Statistics Canada narrowed its definition of “total currency and deposits.” Even under the new definition, this hoard of dead money surpassed the $600-billion mark by the end of 2013.
The corporate sector’s aggressive accumulation of cash helps to explain the lack of investment and employment growth. It also strengthens the case for reversing corporate tax cuts to fund needed investments in public services and infrastructure. If corporate Canada will not invest its dead money, the government should resuscitate some of it.
Photo: Sharon Drummond/flickr
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