On any given day now you can expect to hear at least one economist, public official or financial commentator express grave concern about the mountain of debt Canadians now carry ….
In a survey conducted for the Chartered Professional Accountants of Canada (CPA Canada), 46% of the respondents said they will spend more money than they did last summer, although very few will go into debt to fund their vacations.
Brexit could affect everything from Canadian housing prices to your savings
At 8:27 Friday morning, financial adviser Rona Birenbaum sent out a mass email to clients, telling them not to panic. She explains she wanted “to help them manage the inevitable emotional response to this kind of event.” The event is Brexit, the shocking vote by Britons to leave the European Union. Soon after the votes were tallied, the British pound and Canadian dollar plummeted, as did stock markets around the world. Canadians saving for retirement suddenly saw flashes of the 2008 economic crisis and, for some, panic set in.
To say Canadians have been on a major spending bender would be an understatement. Our consumer debt-to-income ratio continues to hit record rates quarter after quarter, and we’re now outspending all the other G7 countries. If the latest predictions from the parliamentary budget watchdog hold true, we’ll hit our highest household debt level since 1990 later this year. Consumer spending was up 6.7% across Canada in the third quarter of 2015, which was the fourth consecutive quarter in which spending increased, according to Moneris, one of North America’s largest processors of debit and credit payments. High-end apparel retailers Saks Fifth Avenue and Nordstrom, which are opening their first stores in Canada this year, are certainly banking on our inability to curb our appetite for spending anytime soon.
Canada has one of the highest rates of collections compliance in the world, and the Canada Revenue Agency’s (CRA’s) collection activities help fund public goods and services to support Canadians. individuals, businesses, and other organizations to meet their tax obligations and pay their outstanding debt.
Borrowing money these days is a fact of life. And so it is more important than ever that people understand how to best manage their liabilities. A recent survey of highly leveraged borrowers by B.C. credit counselors suggests many who get in over their heads are woefully uninformed about their best options for action.