The latest findings on personal debt in Canada are very alarming as you can see from the headlines:
- Canadians dragging around too much debt Toronto Star
- CGA report: Canadians on the brink of debt spiral News1130
- Canadian household debt reaches $1.3 trillion St. John’s Telegram
- New survey shows Canadians are in record-setting debt 660 News
- A MOUNTAIN OF DEBT ReportonBusiness.com
- Debt levels ‘alarming,’ study says The Gazette (Montreal)
The CGA (Certified General Accountants) survey of 2,013 Canadians in November highlights the following situation:
Current household debt is at a "highly disturbing" level, especially considering the prospects are slim that financial security will improve in the recession. Canadian household debt is at an all-time high, reaching $1.3-trillion at the end of 2008, up dramatically from $1-trillion in 2007. That means household debt levels have climbed to $39,597 per Canadian from $23,885 in 2000 – an increase of 66 per cent in nine years.
A growing portion of household debt comes from credit cards and personal lines of credit, reflecting a rising use of credit for discretionary spending and non-durable goods. This means debt is increasingly used for consumption rather than for assets such as homes and vehicles. A CGA survey of 2,013 Canadians in November found that 58 per cent said their day-to-day living expenses are the main cause of their increasing debt, and that 21 per cent of people in debt said they can no longer manage the load.
Given that Jim Flaherty, Minister of Finance, confirms that Canada is still in a deep recession this does not bode well for the coming months.