Oh
Canada! Debtor Nation The clock ticks at an astonishing rate. Numbers in the far right column change before they can even be read. Higher and higher they go. This is no ordinary clock. It is a “debt clock” that allows viewers to watch as Canada plunges further into the abyss of debt. At the time of this writing, the clock reads $690.8 billion and climbing. Were Canada’s debt divided evenly among its citizens, each person’s share of the debt would be $18,688. But that is only one person’s share of the national debt. Readers in British Columbia would each need to add $14,200 more to account for their share of the provincial debt. Those in New Brunswick or Ontario would need an additional $18,206 and $21,724, respectively. Other provinces are in a similar condition. While you may not have been aware of the specific numbers, the fact that Canada and most other Western nations have put themselves in such an incredibly poor financial position is likely unsurprising. Many are quick to blame the government for the failed policies and dismal planning that have certainly contributed to the current situation. Less frequently discussed, however, is the looming crisis of dangerously high levels of household debt. Household Debt Speaking at the Chamber of Commerce in Yellowknife in the Northwest Territories, Stephen Poloz, Governor of the Bank of Canada, stated succinctly, “For most Canadians debt is a fact of life, at least at some point” (“Canada’s Economy and Household Debt: How Big Is the Problem?” BankofCanada.ca, May 1, 2018).
10 Tomorrow’s World | May-June 2019
Canadian household debt has surpassed $2 trillion. That’s an additional $54,000-plus per person. Two trillion dollars can be difficult to fathom, so it is often broken down and described in terms easier to comprehend. Comparing debt to disposable income (how much income remains after taxes) can help paint a clearer picture. Canadians, on average, owe roughly $1.70 for every dollar of disposable income. Poloz describes this figure as “a Canadian record, and up from about 100 per cent 20 years ago.” A rise of 70 percent in 20 years should be enough to give everyone pause. Of course, there are some who are debt-free, and others who have their debt well under control. Consider that a mere 8 percent of Canadian households owe more than 20 percent of that $2 trillion in household debt. A recent Global News article highlights just how little financial wiggle room many Canadians have: For 10 per cent of Canadians, the margin of error when it comes to household finances is even thinner, at $100 or less. But those with anything at all left at the end of the month were in better shape than many: A whopping 31 per cent of respondents said they already don’t make enough to meet all their financial obligations (Erica Alini, “Over half of Canadians are $200 or less away from not being able to pay bills” GlobalNews.ca, May 8, 2017). Changing the Way We Live It is not surprising that the current economy is affecting the way Canadians live their day-to-day lives. Home ownership used to be a “life milestone,” viewed as an
TomorrowsWorld.org
