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That’s brought total external debt financing of Canadian banks to about $850 billion through last September, and it’s easy to conclude that at least some of the new foreign debt has helped drive mortgage lending. In some cases, the linkage with residential mortgages is direct.

Foreigners are already invested in the nation’s housing market through the intermediation of banks, whether they’re landlords or not.

External Debt Rescue

Speaking of external debt, one benefit (among many) of the recent rebound in commodity prices is that Canada’s growing reliance on external financing should start to abate — and not a moment too soon.

Statistics Canada is likely to report Wednesday the country’s current account deficit — what it borrows from the rest of the world to finance its spending — narrowed considerably in the last three months of 2016 on the back of higher receipts from oil exports. That may represent a break from an almost two-year run of record foreign borrowing, which if continued would become a major economic vulnerability.

Here are the numbers:

A fourth-quarter deficit would be Canada’s 33rd-straight quarterly current account gap, an accumulative $463 billion over that time or about 3.2 per cent of GDP. The country’s last surplus was in the third quarter of 2008. The deficits were particularly bad over the past year and a half as oil prices fell, reaching records — one of the worst external-account performances among advanced economies. Canada’s external debt has doubled since the recession to $2.3 trillion. That’s greater than the size of the country’s economy, and compares with less than 60 per cent of GDP 10 years ago.