Austerity? Not for the Canadian Consumer
Canadian Consumer Debt Zoomed 9% Y/Y in 2013 according to Equifax as reported by CBC News today in advance of Minister of Finance Mr Flaherty's Budget, scheduled to be tabled tomorrow. If the government budget again includes their mantra "We are going to Balance The Budget in 2015" (Oct 2015 is when the next federal election is), then a 9% annual growth in private sector consumer debt is going to increase even more unless lenders freak and turn off the tap, or consumers withdraw into balance sheet repair. Don't worry about non-conventional mortgages (mortgages of more than 80% Loan to Value); they are all insured mostly by you dear tax payer. Mortgage debt clocks in at almost two thirds of Canadian Consumer Debt and that increased 12% over the last year.
As can been seen by the charts below, Government Debt to GDP is curving down and that is not occurring because we are a successful export country. Nope... we are an import country as reflected in our Trade Balance which has been locked into a 5 year negative channel since the March 2009 Pit of Gloom. Government Spending Growth has been reduced (via Balance the Budget Policy) and the hit to the CA$ in the last year has driven up the cost of imports and most of the stuff we buy. In order to maintain its lifestyle, the Private Sector is using credit in the absence of Government Sector spending and a chronic Trade Balance deficit.
"Family matters have pressed upon my time and after more than 16 years of publication, I have transferred ownership of this website and database. Thanks to all my readers who have encouraged me over the years."
July 31, 2021
History, Charts & Curated Readings
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense