Fifty-eight per cent of consumers are concerned about their debt loads, according to the January RBC Canadian consumer outlook index, which comes out today. It’s the first time that that question has been added to the survey, but it’s a fairly safe assumption that concern has risen. Globe and Mail
High debt burdens looming in Canada…sound familiar?
February 1, 2010
Remember a couple years ago when the US economy tanked because mortgage debt burden was so high? Well…I do. And I think I might see an unsettling echo of this occurring in Canada as well.
The recession has provided policy makers with the mandate to do basically anything that could increase GDP. And they used that mandate. A lot.
Keeping interest rates at record lows coupled with a massive stimulus package has provided Canada’s economy with some precarious stilts. The outcome? For the first time ever, Canadians have actually INCREASED their real debt burden during a recession.
Hopefully new home owners took into account that interest rates are likely to rise, which will make their monthly payments rise too. But our neighbours to the South had a problem with that (sub-prime mortgages ringing any bells?). Perhaps Canadians are a bit better at planning their finances…but maybe not. Fingers crossed!