Canada is $190.4 billion poorer than it was three months ago, thanks mostly to the country's natural resource stockpile, which has lost three-quarters of its market value in little more than a year, StatsCan data shows.
The country’s national wealth, meaning the value of all assets outside the financial sector, fell to $9.205 trillion in the third quarter, down 2 per cent from the second quarter.
The value of Canada’s natural resources actually fell more steeply than that, losing $285.4 billion in value in three months.
That precipitous drop was offset a little by the hot housing markets in Toronto and Vancouver. Thanks to double-digit price increases in some segments of these markets, homeowners got $48.7 billion richer, in total, in just the past three months.
Still, the market value of Canada’s resources has in effect collapsed, falling 75.7 per cent since a peak in the second quarter of 2014.
Trevor Tombe, an assistant professor of economics at the University of Calgary who tweeted the chart above, says it’s the result of falling prices.
“It’s not just oil either,” he wrote in an email to HuffPost Canada. “Using the Bank of Canada commodity price index … you can see that a broad basket of commodity prices is basically at half its [second quarter of] 2014 level.”
Economists largely blame the slump on overproduction. Years of high resource prices prompted large amounts of investment that resulted in high production levels.
Now, with prices in decline, producers are cutting back. But in oil, a war of attrition has broken out. OPEC, led by Saudi Arabia, continues to pump out oil at high rates, in an effort to shut down new competitors like the U.S.’s shale oil play.
Some observers say Canada has been hit as hard or harder by OPEC’s maneuvers than the U.S. has been.
With carbon emissions limits coming into force around the world, they argue that much of the world’s oil, including Canadian oil, will have to remain in the ground, turning it into a “stranded asset.”
However, even this group largely agrees that today’s oil price collapse is the result of overproduction, and not that “carbon bubble” bursting.