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Container ships are loaded and unloaded in Delta, B.C.Lyle Stafford/The Globe and Mail

A new study from National Bank Financial offers more evidence contradicting Bank of Canada Governor Mark Carney's controversial assertion that Canadian companies are hoarding cash instead of putting their money to work.

Most of Canada's publicly traded companies are not sitting on "dead money," but are actually doing a good job of returning cash to shareholders or funding growth and acquisitions, according to the investment bank's analysis.

NBF screened all 327 public companies followed by its 27 analysts, and discovered they hold over $55-billion in cash. But more than 55 per cent of these firms are already returning capital to investors through dividends or other distributions, and more than 20 per cent have share buyback programs in place.

Almost all of the other companies have comprehensive capital spending programs, or are preparing for acquisitions, the study says.

NBF's chief economist Stéfane Marion acknowledged that his firm's analysis includes only publicly traded firms, and said some private firms may be holding on to a lot of money."It doesn't mean that privately held companies are not sitting on significant amounts of cash," he said. "It could be that small and medium-sized corporations have to do this because they don't have as much access to credit markets," he said.

Those private firms know that if there is some kind of financial crisis similar to what happened in 2008-2009, they may have trouble getting bank loans, he added.

However, the public companies followed by NBF are "not that much out of line" with their cash, Mr. Marion said. On average, the 327 companies have about $200-million in cash each, and most are using the money productively.

The cash on the firms' balance sheets represents about 6 per cent of their market capitalization and is "an acceptable amount of cushion that investors typically appreciate," the report says.

The firms on NBF's list with the most cash are Suncor Energy Inc. with $5.2-billion, Teck Resources Ltd. with $3.6-billion, Bombardier Inc. with $2.5-billion, and Air Canada with $2.4-billion.

Companies with the highest proportion of cash relative to their market capitalization include Air Canada (804 per cent), Transat A.T. Inc. (199 per cent) and PhosCan Chemical Corp. (129 per cent).

The NBF report said most public companies are not likely to dramatically boost their payouts to shareholders in the near future, although some could increase dividends or perform share buybacks .

The NBF analysts identified 46 firms in this position, including the investment bank's own parent, National Bank of Canada, where NBF forecasts a dividend increase in every other quarter of 2013.

Other companies in a position to return more capital to shareholders include AGF Management Ltd., Agrium Inc., Brookfield Renewable Energy Partners, Enbridge Inc., Potash Corp. of Saskatchewan Inc., and Westjet Airlines Ltd.

Mr. Carney made his comments Aug. 22, after a speech to the Canadian Auto Workers. He said many firms are sitting on cash that should be used to expand or returned to investors. He also said Canadian executives are being too cautious, and are underestimating the resolve of the central bank and other authorities to guard against a financial crisis.

Many companies disagreed strongly with Mr. Carney's remarks, pointing out that they are doing what he asked – putting money into major projects and returning excess cash to shareholders.

GNP data released last week suggested that business investment is actually providing a strong boost to the Canadian economy.

Follow Richard Blackwell on Twitter: @blackwellglobeOpens in a new window

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