Latest CGA-Canada debt report finds specific groups especially
TORONTO, June 14, 2011 /CNW/ - While consumer spending may be down in
the first quarter of 2011, many Canadians are continuing to struggle
with record levels of household debt, according to the latest research
report from the Certified General Accountants Association of Canada
(CGA-Canada). In fact, household debt has reached a new all-time high
of $1.5 trillion - and for those already feeling the strain of lower or
stagnant incomes, or personal circumstances, the situation is dire.
"The debt of a typical household is rising," says Rock Lefebvre,
CGA-Canada's Vice-President of Research and Standards and co-author of
the report. "And the financial situation of certain groups of
households is much worse than average and continues to deteriorate.
This is concealed if you focus only on the national or aggregate
The survey-based report reveals several alarming trends, as
single-parent families, retired Canadians, and those with annual
household income of less than $50,000 face a bleak financial situation.
"The report confirms that more than half of indebted Canadians are
borrowing just to afford day-to-day living expenses like food, housing
and transportation," adds Anthony Ariganello, President and CEO of
CGA-Canada "For these individuals, there is little hope for improved
Highlights and the full report, A Driving Force No More: Have Canadian Consumers Reached Their Limits are available on the CGA-Canada website.
Among the key findings:
Some 57 per cent of indebted respondents said daily living expenses are
the main cause for their increasing debt;
More than half - 58 per cent - said their household income had remained
unchanged or decreased over the past three years, while 86 per cent of
those whose income did increase said it did so only modestly;
If household debt was spread evenly across all Canadians, a family with
two children would owe an estimated $176, 461;
The debt-to-income ratio in households reached a record high of 146.9
per cent in the first quarter of 2011, compared to 144 per cent in late
Savings rates inched down in 2010 and continue to cause concern. Some
27 per cent of non-retired Canadians commit no resources whatsoever to
savings, even for retirement;
Households with an income of $50,000 and under are six times more likely
to be financially vulnerable in terms of debt-service ratio;
The single-parent family is the only category where debt increases with
age. Those families have two-thirds more debt than couples with no
More Canadians are carrying debt into retirement, with one-third of
retired households carrying an average debt of $60,000 and 17 per cent
carrying $100,000 or more.
Lefebvre says that while the government has taken a number of important
steps to address some identified shortcomings, household balance sheets
aren't noticeably recovering.
"It's important that the dynamics of household indebtedness remain high
on the radar of policy-makers," says Lefebvre, "particularly when it
comes to policies and incentives that encourage Canadians to improve
Founded in 1908, the Certified General Accountants Association of Canada
serves 75,000 Certified General Accountants and students in Canada and
more than 90 countries. Respected accounting and financial management
professionals, CGAs work in industry, finance, government and public
practice. CGA-Canada establishes the designation's certification
requirements and professional standards, offers professional
development, conducts research and advocacy, and represents CGAs
nationally and internationally.
CGA-Canada has been active in developing impartial and objective
research on a range of topics related to major accounting, economic and
social issues affecting Canadians and businesses. The association is
recognized for heightening public awareness, contributing to public
policy dialogue, and advancing public interest.
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