Where Has the Money Gone: The State of Canadian Household Debt in a Stumbling Economy
Rock Lefebvre () and
Elena Simonova ()
Additional contact information Rock Lefebvre: Certified General Accountants Association of Canada
Elena Simonova: Certified General Accountants Association of Canada
Increasing debt of Canadian households has been a subject of intense discussion for a good number of years. In the current economic situation, thought, the topic of household indebtedness is rapidly becoming a more critical area. This paper seeks to understand the extent to which the 2008 economic and financial crisis worsened financial positions of Canadian households. To that end, the paper imparts the key findings of the public opinion survey commissioned in 2008, considers changes in the main indicators of household indebtedness, and discusses the implications of the economic shocks on indebted households. The analysis shows that the measures of financial wellbeing of the household sector have deteriorated significantly over 2007 and particularly in 2008. Stagnant or even declining income, slow and lengthy process of rebuilding financial wealth and increasing real debt-service burden make the prospects of improving households’ financial situation in the near future low.