50% Of Canadians Say They Are Within $200/Month Of Being Unable To Pay Their Bills

Tyler Durden's picture

It was just last month when we profiled Canada’s “other problem”: record high household debt.

Canada is struggling to cope with falling crude prices which have put enormous amounts of pressure on some parts of the country, most notably Alberta, where suicide rates are on the rise, as is property crime and foodbank usage.

Amid the malaise, households are also being pressured by persistent CAD weakness - which is of course a symptom of falling crude. The currency’s decline has driven up prices for things like fresh fruits and vegetables, 75% of which Canada imports. That puts an extra burden on households that are already laboring under record debt.

As we showed three weeks ago, household debt relative to disposable income is sitting at 171% in Canada meaning that for every $100 in disposable income, households have debt obligations of $171. That’s the highest figure for any G7 country.

That’s disconcerting for any number of reasons. As we wrote, “this would be bad enough in a favorable economic environment with a benign outlook for rates, but it's a veritable nightmare when the economy is sliding headlong into recession and central planners are hell bent on trying to normalize policy some time in the next five or so years.”

In other words, the outlook for Canada’s economy isn’t good, and that means joblessness is likely to rise going forward...

But interest rates have virtually nowhere to go but up - at least in the medium to long-term. Sure Stephen Poloz may cut rates one or two more times to try and help the oil patch avert certain insolvency, but at 50 bps, there's only so much lower Canada can go unless the BoC intends to experiment with NIRP. 

This means that households could face the disastrous prospect of rising rates in an unfavorable economic environment. Think a monetary policy mistake like hiking into a recession can't happen? Just look at what the Fed did in December. Throw in the fact that many families are overburdened thanks to the astronomical cost of housing in places like Vancouver and Toronto and one is inclined to think that some Canadian households may find themselves in quite a bit of trouble going forward. 

But don't take our word for it, just ask Canadians, half of whom said in response to a new Ipsos Reid survey that they are within $200 per month of not being able to pay their bills and make their debt payments.

"Ipsos Reid conducted the poll about a week after the Parliamentary Budget Office issued a report on Jan. 19 that said Canada has seen the largest increase in household debt relative to income of any G7 country since 2000," The Calgary Herald writes, adding that "31 per cent of respondents said any increase in interest rates could move them towards bankruptcy".

The survey also found that 25% of Canadians are already unable to cover their bills and service their debt.

So what do you do if you're the BoC? Cut rates to boost the economy and rescue the oil patch at the risk of driving the cost of imported goods through the roof, thus pressuring consumer spending and thereby creating another headwind for the economy? Or hike to bolster the loonie at the risk of tanking not only the oil patch but also the 31% of the country that say they'll slip into bankruptcy it rates rise?

Your guess is as good as ours.

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Looney's picture

Slightly OT…

TEHRAN (Fars News Agency)- Unofficial sources in Riyadh disclosed that the Saudi regime is in possession of atomic bombs, adding that the Saudi regime will carry out its first nuclear test soon.

Daham al-Anzi, a prominent Saudi political analyst, told the Arabic-channel of Russia Today that Riyadh has acquired atomic bombs since two years ago and will likely carry out its first nuclear test within weeks.

Asked if he is confident about the revelation, he said, "Yes, Yes! As simple as that! We have atomic bombs. It is not a piece of urgent news. The world powers know that we have the bomb and we wanted to test it”.

US sources said last May that Saudi Arabia had reached out to its ally Pakistan to acquire “off-the-shelf” atomic weapons as a nuclear arms race begins to shape up with Shiite rival Iran.

So, if they DO have it and test it, are we gonna slap’em with sanctions, freeze their assets, implement a naval blockade? ;-)



max2205's picture

6 Mth s ago that 200 was 400 

greenskeeper carl's picture

thats unpossible. Bernie Sanders told me that free healthcare was a main tenet of prosperity for all, and they have free healthcare, so, logically, they should all be rolling in money, right?

CounterPartyVice's picture

And that's 200 CAD which is merely 140 USD

Caviar Emptor's picture

But wait a minute, they want to stop printing high denomination bills...isn't that because prices are going down?? Thanks to CB magic, That $200 will buy more and more

tmosley's picture

Best way forward: CBs recognize that they can't fix this mess and disband, allowing markets to once again set rates. A new equilibrium between savings and loans is formed, likely with interest rates around 30%, if not higher. As the economy improves due to vastly enhanced savings (more interest means more savings), the rate goes down to something more palatable, but now only those who are truly creditworthy can borrow, ie the way things are supposed to be.

Laowei Gweilo's picture

$7 cad for a handful of raspberries yesterday =p ffs


no worries though, Russia knows what's up


get that Syrian war brewing and oil will be back up in no time to save RUS and CAD

Stuck on Zero's picture

Conditions in Canada will drastically improve by bringing in hundreds of thousands of Somali and Middle Eastern immigrants.

Abitcoinbrain's picture

oh I agree, Rice and crime are the new staples which means more police YA

Manthong's picture

Well, that could lead to some kind of kerfuffle, eh?


ruffles's picture

But god damn it, Trudeau has nice hair!  Have you seen it??! His hair can sponsor them all   0___0

Lynx Dogood's picture

Cheap farm land in Canada soon. Stay out of the cities.

Yung Saver's picture

Downvoted this, so naturally I must defend myself.

In Canada, the health care system is finded by income, sales, and corporate taxes that, combines, are much lower than what americans pay solely in premiums.

So then, if Canadians pay less out of pocket for roughly equal (but actually better) healthcare, your arguement falls pretty flat.

The US right now is some sort of fucked up hybrid of Canadian and "Free Market" healtcare. IMO, it needs to be either one or the other. Either way is better than the shitstorm we have currently.


Yung Saver's picture

Downvoted this, so naturally I must defend myself.

In Canada, the health care system is finded by income, sales, and corporate taxes that, combines, are much lower than what americans pay solely in premiums.

So then, if Canadians pay less out of pocket for roughly equal (but actually better) healthcare, your arguement falls pretty flat.

The US right now is some sort of fucked up hybrid of Canadian and "Free Market" healtcare. IMO, it needs to be either one or the other. Either way is better than the shitstorm we have currently.


owensdrillin's picture

I'm starting to believe less and less on zero hedge. I bought a long English cucumber for $1.57 today ($1.05 US). Maybe if they quit showing the prices from fuckin Nunavut in their national enquirer stories. When the natives asked for land they wanted to know which piece they could have and we said "none of it". Kinda backfired

memento_mori's picture

ZH is just an extention of RT and Pravda, I come here for the entertainment, it is a mixture of british tabloid crap with russian propaganda. Take it with 20lbs of salt. 

green_dog's picture

Where I'm at - out east, not up north - an English cucumber is $3.50; and a pack of three smaller ones is $6.59.

jwoop66's picture

Is that what those things are; English cucumbers?   I see them a lot and just figured they were the latest trend food.  Well, they are, but now I know their name!

Superdude's picture

Agree, in SK here, no $20 cauliflower or expensive cukes. If something is expensive, buy other produce which is not difficult and can add nutritional variety. I remember when ZH actually had stock analysis, then Glen Beck got on it and then ZH was sold to ABC Media. Now, most articles are only slightly better than Huffington Post

U4 eee aaa's picture

Cabbage for all comrade. Cabbage for all!

Canadian Renegade's picture

We had $3 cucumbers and $8 cauliflower here in Albert too. It only lasted about 2-3 weeks though. 

Still produce prices are up YoY. Certain things like cucumbers are greenhouse grown locally except for a couple months of the year so they will be more reasonable. Since not denominated in USD.

BryanB2's picture

I am Calgary  rightnow.  Visiting and observing.  Massive layoffs way to.many brand new apartments and homes built and too many going vacant.  

  Social services with unemployment lasts three months locals running on borrowed time it seems.  

Will.be here all week looking at what lays ahead for us in America 

ShrNfr's picture

Well, duh. Everyone with a brain (that leaves Obama and Kerry et al. out) knew that the KSA had bought the option to get some of the Pakistani nukes. I doubt they will waste on by testing it unless they want to show that they have them for real. Pieces in our times. Total flaming assholes in this administration.

Low IQ fan of VVP's picture

And who is an "ally" of Pakistan? China...? And who is an "ally" of Iran? Russia...? Yet who are the sworn enemy rival of each other? Forget about Israel; I don't think Iran's sworn enemy is Israel but Arabia--after all it's the PERSIAN GULF! And there's only one way to solve that...

Humanity has gone batshit crazy; it's like an inflamed hemorrhoid that just refuse to go down. 

and by this setup you'd think Russia and China may have already started thinking about the next "Cold War" between the two superpower after WW3, or maybe China would be contend with just Australia. Superpowers need plenty of buffer territory and Mongolia and Kazakhstan just doesn't seem like it's enough--they're probably going to get swallowed up anyway. Might as well swallow up Ukraine too; can't let (grand)"father"land Kiev Rus be loose again--you know he's got dementia and keep forgetting about himself, otherwise he's going to take a radioactive dump in certain places and ruin everything--I think that's even worse than nuke missiles (at least those are more like controlled demolition). Same for Korea and Japan--they use Square Character writing system anyway; maybe leave Tokyo to the Russian for similar reason as above--she's basically stuck to the toilet and I don't think China know how to deal with it--you know like the young these days that "escape" to the cities actually perhaps because they don't want to be stuck with the old people--you know, different moral--none of that ACTUAL taking care of elder stuff (sending money doesn't count since they just burn it as "underworld money" on "remembrance day" or just give them away as "peaceful gestures" which mostly are just being scammed).

economicmorphine's picture

This is the kind of shit that happens when you get rid of the penny.

Jack Burton's picture

Can this seriously be so? We no longer see much of our Canadian neighbors. Thunder Bay is up the road a couple hours. They beat a path along the North Shore Highway and then south to Minneapolis for shopping and entertainment. Mall of America being big on their list. But I can't remember when I last saw a Candian plate going through town. A real world of hurt must be being put on resources Canada.

pitz's picture

Mall of America?  Really?  Ever been there?  Few Canadians can afford those prices when they can just hit the outlet mall at Albertville or elsewhere in the MSP area and buy most stuff at less than half the prices.

FredFlintstone's picture

I was at the Mall of America 10 years ago and did not know what all of the hub bub was about. Seemed empty and dead.

pitz's picture

Yeah I was dragged there on a long layover by the missus (Mall of America is literally off the end of one of MSP's runways).  Ended up only buying a $10 jar of salsa.  Everything else was shockingly high, at least twice as much money as available in Canadian malls.  Concluded the place was mostly a glorified tourist trap. 

NoWayJose's picture

I used to get a lot of Canadian coin when passing through Wisconsin and Minnesota. Now - not so much!

bytebank's picture

New Passport laws don't help either. All it used to take to cross the border was a drivers license. Now you have to shell out ove $100!to get a Passport. I bet you that thus us the real culprit.

yogafan's picture

People were lining up in droves to get their passport when dollars were parity.

swmnguy's picture

Well, I only live about 4 miles north of the MOA, and you're highly unlikely to find me there, either.

But it's a matter of exchange rates moremthan anything else.

Osmium's picture

Lake Nokimis area.  Nice!

MopWater's picture

A bunch of fellow Minnesotans...very cool.

pitz's picture

Yet certain people think that Canada is being showered with money from China, Russia, and, of all places, even Iran.

Canada is, like China, on the cusp of a massive deflation with a dramatic up-valuation in the currencies.  I don't think many policy makers really understand how dire the situation is in Canada. 


Haole's picture

As long as they can just spray paint everything either green, rainbow or nipple pink, the sheeple will applaud their brilliance... 




Linglishboy's picture

I know the Queen won't bail them out.

stocktivity's picture

Speaking of the Queen, that old bitch just won't step down. Imagine  being Prince Charles and spending most of your 67 years waiting to be king. Even Lady Di got sick of waiting for the dork to become king.


CANADA's demise signals the very end zero sum game for the United States of America. Once we go down there is virtually no hope in Hell that the one per cent Americans will be able to survive. Not even the MIC will be able to help America after that.


Welcome to Zombie Empire.

Stormtrooper's picture

This is actually good news!  The Canadians are actually very good at budgeting because they still have several hundred dollars left in their pockets every month even after paying for hookers and blow.  Congratulations Canooks.  Americaniskies have nothing over you.

Ms No's picture

I am starting to think there is a committee somewhere sitting around and deciding exactly how to screw the standard of living for every soul on Earth down to the miniscule detail.  Not because they want to steal the money (they already control all of that) but because they want us completely enslaved. 

"Oh wait, you mean that the average Canadian family can still afford 15 rolls of toilet paper per month?  That's 4 rolls above the reduction quota we have set.  We haven't raised the price of cucumbers or stamps in a while, get them there.  Lets raise drug prices again too.  Mark is initiatating the program to have all dog food become half grain filler.  This will increase veteranary medical costs as well as dog food costs despite deflation.  Dave what do you have?"

bbq on whitehouse lawn's picture

If you control debt you control prices, if you control prices you can force additional debt. Supply side economics.

yogafan's picture

They're all out to get you,schizoid.

Fuku Ben's picture

You are right on all accounts. While I almost posted some details on how more of it works the other day I chose not to for a few reasons. Being politically correct was not one of them. The cowards that won't disclose their crimes deserve every opportunity to confess to everyone and atone for their sins.

Some of the things I comment are the tiniest fraction of what is going on and even that causes a lot of hostility. That's what happens when lies and crimes compound over time. If I were them I would be very afraid to disclose the details too. It is very complicated and reminds me of the lines in Marmion:

Oh, what a tangled web we weave
When first we practise to deceive!

cheech_wizard's picture

Some people I knew back in college had a name for them. The C.P.L.C.

Standard Disclaimer: The Curtailment of Personal Liberties Committee... Looking back, we were so fucking prescient.