WSJ on Canada debt levels

ReadyToPop pointed out this article in the Wall Street Journal:

TORONTO (Dow Jones)–Canadians are justifiably worried about their rising debt loads.

According to Statistics Canada, household liabilities rose by C$31 billion in the second quarter to stand at a record C$1.48 trillion at the end of June. Meanwhile, household net worth fell for the first time since early 2009, declining by C$34 billion to C$5.9 trillion.

Those changes pushed the household debt-to-asset ratio up to 19.9% and the debt-to-net worth ratio up to 24.9%, each matching all-time highs, RBC Capital Markets noted.

Meanwhile, Scotia Capital has estimated that Canadian households have more debt as a share of total household assets than any other G7 country excepting the U.S. And the trends augur poorly: the U.S. Federal Reserve reported Friday that U.S. household debt tumbled by 2.3% as Americans continue to tighten their pursestrings. Within six months, Scotia Capital says, Canadians will be more heavily indebted than Americans.

Additionally, The Boeckh Investment Report notes the U.S. savings rate has risen to 6.5% while the Canadian savings rate has fallen to 2 1/2%.

139 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
realpaul
realpaul
9 years ago

"On the backs of the taxpayer we will prosper" is the mantra of the civil service. EI Premiums..in spite of running of surplus…are being increased as a hidden new income tax. Rates will rise One Thousand Percent more than the stated official rate of inflation. http://www.vancouversun.com/business/Feds+expecte… Gouge gouge gouge until the citizen is entirely beholden to the government for handouts as he is unable to support himself on his wage. The march to 100% tax is well underway as we are far in excess of 85% now according to numbers that are already years out of date. What about saving money by cutting the fat as is being done in every other modern economy?????? Is Harper so desperate for his majority that he won't he won't cut the civil service until he has it? Does pandering to every special intrest… Read more »

Starving Artist
9 years ago

The Con strategy has been not so much to rely on deficit spending per se, but to encourage increased consumer debt as an “off the books” stimulus. And we can see the results in spades. Maybe, but I just got back from driving a big loop around southern BC to the Rockies and back, and the countryside is covered with those "Canada's Action Plan" billboards. The feds are pumping huge money into highways & bridges. It looks like quite a few of them are over half done or finishing up, so I don't know how much longer those construction workers will be busy. Another thing I noticed was how "poor" the Kooteney & Yoho National Parks seemed on the BC side as opposed to the "rich" Alberta side facilities in Banff and Lake Louise. I suppose it's a matter of… Read more »

fixie guy
fixie guy
9 years ago

@copacabna

Anoymous Says: So perhaps it’s you or your attitude."

Lol, there you go copacabna, 'your attitude' causes people to behave this way. They're justified going out of their way to push you aside because of your shitty attitude.

Some people here are so fucked in the head they believe any of that makes sense. I agree, if the local culture has this Stepford undercurrent in the best years of Vancouver's history, imagine the full Picton when it goes sour.

Anoymous
Anoymous
9 years ago

@copacabna:

"I live downtown, so I literally walk everywhere, so I see it alot."

Well I live downtown too, so like you I literally walk everywhere. And I don't see it at all. So perhaps it's you or your attitude.

copacabna
copacabna
9 years ago

I meant walk under the awning when it rains. Damn, need coffee.

copacabna
copacabna
9 years ago

"@copacabna: I guess I live too far out in the burbs to understand exactly what you mean. You mean they go way out of their way to make you get out of their way?" I live downtown, so I literally walk everywhere, so I see it alot. Like I said, at first I thought it was like Manhattan, where everyone is just in a rush. But it happens for no reason. You will walk on the far right, and people will veer towards you. You can get forced into the street, or out of a crosswalk. Its a territorial thing, a passive agressive way of trying to establish social status. These are the same people that use an umbrella and wslk under the crosswalk. People will bump into you and not say anything. I read one journalist describe Vancouver as… Read more »

SuperSmartBull
SuperSmartBull
9 years ago

I love how people rant about the quality of construction today and then invariably compare it to some century old or more home they lived in at some point. Of course those old remaining homes are solid, that's why they lasted so long! You don't think there's lots of old shacks that didn't stand the test of time? It's like pointing to a restored model T cruising down the street and saying, "See they don't make cars like that anymore, today's cars are such poor quality!"

Anonymous
Anonymous
9 years ago

@say what?:

"Outside walls are required to be 2×6 for greater insulation"

Maybe they are, maybe they aren't. All the new construction I see around where I live, including big projects done by major developers are built ENTIRELY out of 2×4 lumber. The only exception being the main floor of some four story buildings (I didn't think this was even allowed)

Patiently Waiting
Patiently Waiting
9 years ago

@say what?:

"needlessly complex in design"

I'm curious what you mean by that. I do agree that brick, unfortunately, isn't practical in an earthquake-zone. I'm just amazed at how our wood houses have gone from pretty to bland to fugly over the generations. We are so lucky to have the raw materials right here in this province, yet we can't build simple attractive housing anymore. Who trains the idiots who design these houses?

"causing rampant unemployment amongst the hated dependent industries"

Well good. This city's culture and economy totally revolves around ugly residential construction. Whether it be tear-down and rebuild, or endless renovations. Maybe we'll have a more diverse economy and sophisticated culture in the future. Wouldn't count on it though.

Anonymous
Anonymous
9 years ago

@Not much of a name…: I heard that they are waiting for people to close on units in OV prior to offering the incentives. I can’t remember where I read it, or how much truth there is to it.

I doubt any. The latest figure reported in the news was 257 sales. As of a week ago, 256 have closed.

patriotz
9 years ago

@Drachen:

Good job Conservatives. Don’t bother paying down the debt, just use deficit spending to try to buy yourselves a majority!

The Con strategy has been not so much to rely on deficit spending per se, but to encourage increased consumer debt as an "off the books" stimulus. And we can see the results in spades.

Note also that CMHC borrowing to purchase mortgages does not show up in the deficit numbers. Until the mortgages that they have bought default.

asalvari1
asalvari1
9 years ago

@say what?:

"say what?" that was very interesting – can you please provide some references or links to read more?

realpaul
realpaul
9 years ago

#68 WTF , C'mon…is that even conversation? One Looney Liberal law professor defending the 'appointment' and 'opinion' of a Looney liberals interpretation of looney liberal justice? Is a like minded basket of loons swamping the country with a Trudeau inspired fuck fest for thirty years going to produce a cohort of loons? One two three…times up. My law professor ( who was also a white bastard – damn us all for saving the world) was also a very political ( seated) Liberal Party Douchebag( the asshole) and afterwards I wrote public relations strategies for those cunts.. ( gun for hire and cynical as hell…never a believer).I'm pretty sure I understand how sleazy the Looney Liberal Political Machine is generally…. and…..how political appointments work in the ethnic ghetto's created ( the Liberal Party carved up territory and flooded small newly created… Read more »

say what?
say what?
9 years ago

Those of you making comments on construction quality have no clue what you are talking about. None. Start reading, please, even the most basic information. I can appreciate the sentiment if you are talking about builders "cutting corners" etc, but concerning the building code and quality thereof… briefly… Brick comes down in an earthquake, and as a structural component is not allowed. In fact, look around your area for the old brick chimneys on the outside of houses, and don't stand near them when the ground starts to shake. Brick as described previously would not be properly vented either. Plywood, OSB, wood in general is structural and has nothing at all to do with building envelope. First step toward eliminating leaky walls: overhangs and sloped roofs! Second step: proper installation of building envelope, especially around windows. Flimsy construction? That plywood… Read more »

Anonymous
Anonymous
9 years ago

@scullboy:

"More then once I’ve been impressed with how drivers stop and wave you across if you look like you’re even thinking about crossing the street… literally. A couple of times I had to give the “no, no, you go ahead, I’m not going to cross” gesture."

That happens to me in Vancouver at least once a week. People here hit the brake instead of the horn. If you're somehow implying that Vancouver drivers are aggressive maniacs then I suggest you spend a couple of hours in Rome.

scullboy
9 years ago

@fixieguy: Dude, I know what you mean, I really do… especially about the penny ante scam artists. Look, if you're going to pull a scam, pull a BIG one! I was in Toronto on business myself a couple of months ago, and I was surprised at how relatively friendly people were. I was also impressed with the quality of service you get in Toronto. Mind you the "relatively" part is important because relative to either Halifax beats 'em hands down. We don't have a lot of bike lanes but then again we don't seem to need 'em. I bike to and from work every day and every single day I'm astonished by how well mannered both cyclists and motorists are. You don't see cyclists acting like the signs and traffic lights apply only to cars. you also don't see cars… Read more »

vreaa
9 years ago

@Best place on meth: Whoaaa! Hadn't noticed that.

Best place on meth
Best place on meth
9 years ago

@Drachen:

Look at Japan, they blow everyone away.

SuperSmartBull
SuperSmartBull
9 years ago

@Anonymous:

He argued that Van RE would only ever go up. Then a few months later he argued that it would not fall. Then that became would not fall much. Now he is arguing that it will fall ONLY 10-20% over a few years.

My position has been consistent throughout, feel free to look at any one of my earlier posts to confirm.

Patiently Waiting
Patiently Waiting
9 years ago

@copacabna: I guess I live too far out in the burbs to understand exactly what you mean. You mean they go way out of their way to make you get out of their way?

Drachen
Drachen
9 years ago

@vreaa:

By my standards Iceland, Italy and Greece have us beat. Those were the only ones I could find. That's public debt vs GDP, which is really the only measure that matters as GDP is the best way to measure how we could repay the debt.

Good job Conservatives. Don't bother paying down the debt, just use deficit spending to try to buy yourselves a majority!

I guess the 'Conservative' moniker refers to social values, 'cause financially they're the worst we've had in decades.

vreaa
9 years ago

Re public debt levels per capita by country:

http://buttonwood.economist.com/content/gdc

Looks like we're right up there.

Anonymous
Anonymous
9 years ago

@SuperSmartBull: Funny… I remember way back when SSB first started posting here. He argued that Van RE would only ever go up. Then a few months later he argued that it would not fall. Then that became would not fall much. Now he is arguing that it will fall ONLY 10-20% over a few years. Holy shit we won! SuperSmartBull is now Average Intelligence Recently Reformed Bear. Dude, for all those idiots out there that bought with 5% down or less on a 600K mortgage or more anything over a 5% drop is a devastating crash. Put this into perspective. We are dealing with a generation of spoon fed morons who thinks the entire world owes them a mansion with granite everything and a 5 car garage. They are stone dead convinced that real estate only ever goes up, every… Read more »

ulsterman
9 years ago

WRT Scullboy's building quality anecdote. I believe this to be one of the most galling aspects of the insane housing prices on the LM. Not only are they insane to anyone in the world beyond the bubble of the "Playground of the Gods", but the quality is so pathetically poor. When my civil/structural engineering dad came to visit me in 2005, he was shocked by the flimsiness of the houses built and being built. I have a distinct memory of helping him cut a hole in the wall of our modest little Irish home – we had a lot of fun (not) drilling through the two layers of brick separated by insulating foam. Our little house – two layers of red brick – solid as a rock 60 years after construction, and yours today for about C$200k in Belfast. And… Read more »

realpaul
realpaul
9 years ago

Canada debt to gdp has exploded in the past couple of years since the US estimated it at 75%. Extrapolate 2010 to 08-09 growth and it is easily pushing 100 plus 2010-100 with the tsunami of additional 'stimulus' and zero growth.

http://www.theodora.com/wfbcurrent/canada/canada_

Bullish on Canada ……. why more than any other country when in fact Canada has surpassed US and UK, Euro, Aus etc in personal debt and negative affordability. Another bone to pick is the lack of transparency and availabilty with real time data as is the case in most other G20 economies.

Being bullish on Canada would mean that information is available for examination….this is not the case…the 'economist' is guessing at best…or he has some super access to information that no one else has…so which is it?