Canada Digging Itself Into Debt?
In recent blogs, we’ve discussed a number of ways that Canadians can save money during the holidays. Going over tips on how to properly budget as well as providing advice on how to locate the best deals, the Synergy Merchant Services Blog has maintained its objective to assist its readers with useful information.
It doesn’t seem, however, as if everyone is taking our advice. Today, Emily Mathieu of The Toronto Star reports that the Canadians are hitting an all-time high for spending more than they can afford, as of late. A Statistics Canada report released yesterday indicated that over the past three months, Canadians have been digging themselves into debt.
Mathieu writes that “Canadians are spending far more than what they are earning on their paycheques — or have to spare after they pay income tax, employment insurance and into their pension plans — leaving themselves far more susceptible to sudden changes in everything from interest rates to employment status.”
As if this wasn’t bad enough, the StatsCan report reveals that Canadians are also earning less or have less disposable income since the recession reduced the number of high paying full time jobs available throughout the nation. Considering this, it is surprising that there isn’t evidence that Canadians have spending a lot less as a result.
With Canada’s economy showing greater signs of strength than that of the United States and Europe, it can be argued that Canadians have a right to feel for confident with spending. However, the findings show a “record high figure (that) puts Canadian debt ratios above the U.S., for the first time since the 1990s.”
Mathieu writes that “during the last quarter, Canadian household debt rose to $1.5 trillion, up from $1.48 trillion reported the previous quarter. The details on how much we borrow, what we spend and what we are worth were laid out in Statistics Canada’s report yesterday.”
Said Mark Carney, the Bank of Canada governor: “In a world awash with debt, repairing the balance sheets of banks, households and countries will take years. Without a significant change in behaviour, the proportion of households that would be susceptible to serious financial stress from an adverse shock will continue to grow.”