If you dread looking at your monthly credit card statement, you can take solace in the fact that you’re not alone.
For the first time ever, Canadians’ debt burden is now greater than the entire Canadian economy.
Look at the financial damage we’ve done to ourselves in just 25 years:
If that’s not bad enough, Canadians now carry more debt than people in any other G7 country. Yes, even our spend-happy, put-our-house-and-two-cars-on-the-Visa neighbours to the South.
“The high level of household debt is undermining the Canadian economy and this represents a significant risk over the medium and long terms,” said Desjardins economist Benoit P. Durocher about this “fairly troubling snapshot.”
So, what gives?
It’s essentially the same issue that causes most other financial burdens in our country: housing prices.
It’s not just mortgages that are contributing to our astronomical debt, though. Average consumer non-mortgage debt balances rose to $21,686 at the end of the third quarter, up from $21,195 in the same quarter last year.
“The recent government outlook of weak economic conditions may have led some consumers to believe low interest rates will be here for a long time, which could result in pushing balances even higher due to low expected borrowing costs,” said Jason Wang, TransUnion’s director of research and analysis in Canada.
People seem to be unaware that those rates could and probably will rise again. Even one percentage point hike could be catastrophic for up to a million Canadians.
Reckless spending – maybe something not worth following Trudeau’s lead on.