Home » Economics » 50% Of Canadians Say They Are Within $200/Month Of Being Unable To Pay Their Bills

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

50% Of Canadians Say They Are Within $200/Month Of Being Unable To Pay Their Bills

50% Of Canadians Say They Are Within $200/Month Of Being Unable To Pay Their Bills

It was just last month when we profiled Canada’s “other problem”: record high household debt.

Canada is struggling to cope with falling crude prices which have put enormous amounts of pressure on some parts of the country, most notably Alberta, where suicide rates are on the rise, as is property crime and foodbank usage.

Amid the malaise, households are also being pressured by persistent CAD weakness – which is of course a symptom of falling crude. The currency’s decline has driven up prices for things like fresh fruits and vegetables, 75% of which Canada imports. That puts an extra burden on households that are already laboring under record debt.

As we showed three weeks ago, household debt relative to disposable income is sitting at 171% in Canada meaning that for every $100 in disposable income, households have debt obligations of $171. That’s the highest figure for any G7 country.

That’s disconcerting for any number of reasons. As we wrote, “this would be bad enough in a favorable economic environment with a benign outlook for rates, but it’s a veritable nightmare when the economy is sliding headlong into recession and central planners are hell bent on trying to normalize policy some time in the next five or so years.”

In other words, the outlook for Canada’s economy isn’t good, and that means joblessness is likely to rise going forward…

But interest rates have virtually nowhere to go but up – at least in the medium to long-term. Sure Stephen Poloz may cut rates one or two more times to try and help the oil patch avert certain insolvency, but at 50 bps, there’s only so much lower Canada can go unless the BoC intends to experiment with NIRP.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase