By Paul Vieira


OTTAWA--Household wealth in Canada increased in the first quarter, marking the sixth straight quarterly gain, even though uncertainty fueled by U.S. trade policy cast a cloud over financial markets and the broader economy.

First-quarter data from Statistics Canada covering national balance sheets also indicated that, while consumer borrowing slowed, a key ratio measuring household debt rose; and institutional investors set a record in terms of net purchases of Canadian government bonds.

Household net worth climbed 0.8% in the January-to-March period to 17.60 trillion Canadian dollars, or the equivalent of $12.87 trillion. In the previous quarter, net worth rose by 1%. The data agency said the wealthiest 20% of households held over two-thirds of financial assets and over half of real-estate assets.

Household borrowing, on a seasonally adjusted basis, slowed to C$34.5 billion from C$41.6 billion. About 80% of borrowing was tied to mortgages. The ratio of credit-market debt to after-tax income rose slightly to 173.94% from 173.51%. Statistics Canada said the ratio remains well below the recent high of about 179% set in the fourth quarter of 2023.

The Bank of Canada cut its main interest rate on seven straight occasions, totaling 2.25 percentage points, from June of last year to this past March. The central bank has held its policy rate steady in its last two decisions, citing firming inflation data.

The balance-sheet report also indicated that institutional investors-- such as chartered banks, pension funds and mutual funds--recorded their largest quarterly net purchase of Canadian government bonds on record in the first quarter, totaling C$43.7 billion.

Last month, the Bank of Canada's No. 2 official, Carolyn Rogers, cautioned hedge funds from taking on too much debt to finance purchases of Canadian government bonds during a period of tariff-fueled volatility in financial markets.

The data also indicated that non-financial corporations are holding about C$913 billion of cash and cash equivalents on their balance sheets, a slight drawdown from the record high of C$925 billion in the previous quarter.


Write to Paul Vieira at paul.vieira@wsj.com


(END) Dow Jones Newswires

06-12-25 0937ET