This is Pretty Amazing!!

Given that the Loonie has been on the rise, the value of our current account actually hit record high is very unusual.

This shows energy is a very inelastic commodity.

On the other hand, with cuts in the automobile manufacturing sector (mostly by GM) in the last couple months, I suspect the surplus of our current account will come down in the coming months - given that energy prices stablize at the current level.

One thing for sure though, Saskatchewan better start exploiting its energy deposit - especially in oil and gas.

Nobody knows if the States will still heavily rely on fossil fuel in a couple decades. Saskatchewanian do not want to miss the good fortune.

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Current account surplus swells

TAVIA GRANT

Globe and Mail Update

Canada's current account surplus hit a record $13.28-billion in the fourth quarter on higher natural gas and auto exports, Statistics Canada said Monday.

The surplus increased by $5.5-billion in the quarter and surpassed the $12.5-billion analysts had expected. The third-quarter surplus was revised down to $7.76-billion. All figures are seasonally adjusted.

Last year, the current account surplus reached $30.2-billion, surpassing its previous record of $29.3-billion in 2000, the government agency said.

The Canadian dollar strengthened as the report showed strong exports and high commodity prices are buoying economic growth. Further details about the health of Canada's economy will come Tuesday with the release of the fourth-quarter gross domestic product.

Monday's report showed exports rose in the fourth quarter, as higher energy prices increased the value of natural gas exports and auto product shipments grew by more than $1-billion.

Imports, meantime, also increased, led by machinery and equipment, industrial goods and energy products.

The current account measures transactions on exports and interest income against imports and interest expenses.

The Canadian dollar rose to 87.21 cents after the release from Friday's Bank of Canada close of 87.05 cents.

Canada's GDP report tomorrow is expected to show real growth of 2.6 per cent in the fourth quarter.

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