The thing about economic expansions is that people are supposed to work, pay down debt and build up savings, so that they can ride out the economic downturn that follows.
Canadians have done the opposite over the past 8 years, and now approach 2018 with the highest debt and lowest cash savings in decades. A recent Ipsos poll, conducted on behalf of MNP, confirms some grim facts:
Bottom line: even if the Bank of Canada were to stay pat, or move to cutting rates again in the new year, Canadians are tapped out in terms of commitments that their income can service. As shown in the latest weak retail sales report for August, they have already begun pulling in spending pretty much across the board, even while still at a cyclical low in unemployment.
Canadian households, the economy and government budgets are woefully unprepared for the payback period now ahead.
