Forget that Canadians are carrying record debt loads and most governments are deep in the red.
Canada is suddenly, and unexpectedly, a creditor nation.
For the first time in at least nine decades, Canada has more assets abroad than foreigners have here. These include direct investments, stocks, foreign currency reserves and the like.
Statistics Canada reported Thursday that the country had net assets of $26.7-billion at the end of last year, up from a net liability position of $302.1-billion at the end of 2012.
Senior economist Peter Buchanan of CIBC World Markets noted that Canada has been an international debtor every year since at least 1926. It's likely the country was in a similar position for even longer given the payments toward the massive debt to build the continental railway.
"Canada is now a net creditor to the rest of the world," said Bank of Montreal chief economist Douglas Porter.
Mr. Porter reckons it's the first time that's happened in decades, and "back at least to the days when the Hudson Bay Co. was shipping beaver pelts to Europe."
The reason for the dramatic turnaround is a combination of strong foreign stock market gains in the U.S. and elsewhere coupled with a roughly 10-per-cent decline in the Canadian dollar since mid-2013.
The result was a 21-per-cent gain in the value of foreign assets, which outpaced a 7-per-cent increase in liabilities.
And the swing occurred even though Canada continues to run a sizable current account deficit – the broadest measure of trade and financial flows. Canada's current account deficit is now 3.2 per cent of gross domestic product.
The net asset position now stands at 1.4 per cent of GDP, compared with a net liability position of 16 per cent of GDP at the end of 2012.
Back in the early 1990s, Canada ranked among the largest net debtor countries in the world. Liabilities peaked at near 50 per cent of GDP in 1993 – around the time debt rating agencies were "busily stripping Canada's triple-A rating," Mr. Porter pointed out.
But being net creditor may not be such a good thing.
Mr. Buchanan said the fact that Canada has moved into a net asset position is "encouraging at first glance," but we should "not break out the champagne just yet."
The main reason Canada has moved into a positive net asset position is because of the drop in the dollar, he said.
"Effectively what has happened is that foreign equities and other assets owned by Canadians have gone up in value, while assets that foreigners hold here have stayed steady or gone down in their own currency," he said.
Rather than being a sign of success, he said, it reflects Canada's weak competitive position, which has resulted in the decline of the dollar.
Still, being close to balance on international investment is good. "It would be of concern if we had a large deficit."
But being on the positive side with a large net external investment position is not always good either, he said. Countries in that position are essentially living off foreign pools of capital rather than the strength of their domestic economy.
"But we're not at that stage yet," he said. "Maybe Polonius had it right. Neither a borrower nor a lender be – at least in the extreme."