Market Commentary - Jan 4, 2016
Market Commentary
Knocking down debt leads the list of 2016 goals for maxed-out Canadians.
It is high-minded and laudable. But this is also the 6th year in row it has topped the list of financial priorities (26%) in an annual survey by Angus Reid.
Canadian household debt to disposable income now stands just short of 164% – a new record high. For every after-tax dollar they have to spend, they owe $1.64. Most of that is mortgage debt fuelled by low interest rates. Although lagging wage growth remains a co-conspirator.
The high debt-to-income ratio has been labeled the "most important vulnerability in our economy". But the Bank of Canada and the economists say we can handle it. And with growing predictions of another rate cut by the central bank it would seem Canadians are heading for another broken New Year's resolution.
Knocking down debt leads the list of 2016 goals for maxed-out Canadians.
It is high-minded and laudable. But this is also the 6th year in row it has topped the list of financial priorities (26%) in an annual survey by Angus Reid.
Canadian household debt to disposable income now stands just short of 164% – a new record high. For every after-tax dollar they have to spend, they owe $1.64. Most of that is mortgage debt fuelled by low interest rates. Although lagging wage growth remains a co-conspirator.
The high debt-to-income ratio has been labeled the "most important vulnerability in our economy". But the Bank of Canada and the economists say we can handle it. And with growing predictions of another rate cut by the central bank it would seem Canadians are heading for another broken New Year's resolution.
