Canadians rank FIRST in the OECD for debt burden…uh-oh!
May 11, 2010
May 11, 2010
Although Canada has been the golden child of the economic recession, as our banking system remained stable, growth outpaced projections, and our real estate market fluorished, there is one worrying statistic that could put our economy at risk: debt levels.
Canada ranks first in terms of debt-to-financial assets ratio among 20 OECD countries…Canadians’ debt-to-income ratio reached 144% by the end of 2009. Financial Post
And while this statistic would be worrying on its own, there is a compounding factor which makes it even more concerning. Households aren’t worried. The report, conducted by the Certified General Accountants Association, also stated that:
Nearly 60% of respondents whose debt had increased – and fully 92% who saw their debt decrease or stay the same – said they felt they could either manage their current debt well or even take on more debt.Financial Post
Wow. You know how in Alcoholics Anonymous the first step is to admit you have a problem? Well, it looks like Canadians need to take that first step– and fast.
If mortgage rates increase by just 2%, which isn’t inconceivable given the fact that mortgage rates have been rising recently, mid-to-high income families could be forced to cut down their “other expenses” by about 10% to remain at the same standard of living.
It seems like Canadians need to get their heads out of the sand– before its too late!