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Those income gains were considerable. By the end of the resource boom, incomes were about six per cent higher than what they would have been if GDI had continued to track GDP. According to my back-of-the-envelope calculations, this works out to a resource bonus of about $4,000 per capita. This premium has since been reduced to $2,500 and is likely to continue to fall. If you add up these increases from the beginning of the boom in 2002, it works out to a total windfall of about $1.3 trillion (in real 2014 dollars). What happened to all that money? Was it frittered away?

It doesn’t look like it. Before the resource boom, the ratio of national net worth to gross national income (GNI) held steady at about 3.4 to one, and that ratio has since increased to 4.1 to one. This suggests that to a very great extent, Canadians saved the windfall instead of spending it. Those numbers are for national wealth, but you see a similar pattern at the household level as well. Household net worth was 550 per cent of disposable income in 2002 and that ratio is now close to 750 per cent.

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To be sure, much of that increase in assets and in net worth is due to increased holdings (and/or valuations) of housing assets and are vulnerable to a potential fall in housing prices. But it doesn’t look like households have rashly put all their eggs — that expression again — into the housing basket. According to Statistics Canada, residential structures accounted for 19 per cent of household assets in 2002, the same ratio we see now.

The end of the resource boom is a negative development, but at least we’re better off now than we would have been if it had never happened; the gains were largely saved and not frittered away. And a good thing, too. God would have been very disappointed in us.

National Post