Average Canadian family debt touches $100,000
Average Canadian family seems to be owing much more than its earnings, the report states. This becomes clear from the fact that the debt-to-income ratio of the average Canadian family has reached 150 percent.
On an average, a Canadian family owes nearly $1500 for every $1000 earnings after deductions of tax.
While the debt ratio has gone up, this has resulted in a decline in the rate of savings for Canadians.
This becomes evident from a comparison of the present savings rate with that of the year 1990.
The year 2010 saw savings rates fall down to 4.2 percent enabling average Canadian families to save around $2,500 for each household while the average savings in the year 1990 was $8000 per household with the savings rate of 13.0 percent.
And this makes it clear that for many Canadian families, recession is still there even though it may be stated to have ended considering the standard indicators of the economy into consideration, states director of programs for the institute, Katherine Scott.
Hence, the governments must become responsible while reducing programs in a bid to cut down their deficits since this has a direct effect on the already fragile financial condition of Canadian families, asserts Scott.
In the year 2010, nearly 17,400 Canadian households were lagging behind in paying their mortgages at least three or four months, the findings show.
Moreover, the rates of bankruptcy and credit card delinquencies have also gone up than the rates before the global economic slowdown.
Nonetheless, several policymakers of the nation have been stressing Canadians to work towards bringing down their household debt since failure to do so might end in jeopardizing their financial setup as the interest rates get back to normalcy.
Canadians have been warned by the Central bank to control their household debts since these are a big risk for the nation’s economy.
The job gains during the recent months have been of low quality than the quality of jobs lost during economic slowdown thus increasing the risk of young and middle class Canadian households, Scott suggests.