The Canadian Press, On Thursday February 17, 2011, 5:48 am EST
By The Canadian Press OTTAWA - A new report suggests the average family debt in Canada has now hit the $100,000 mark.
In addition, says the Vanier Institute of the Family, the debt-to-income ratio measuring household debt against income, is a record 150 per cent.
This means that for every $1,000 in after-tax income, Canadian families owe $1,500.
The Institute says in 1990, average family debt stood at $56,800, with a debt-to-income ratio of 93 per cent.
Just as the debt ratio has climbed, the savings rate has slid downward.
In 1990, says the Institute, Canadian families managed to put away $8,000 for a savings rate of 13 per cent. Last year, the savings rate had fallen to 4.2 per cent, averaging just $2,500 per household.
Other data compiled by the Institute shows the number of households behind in mortgage payments by three or more months climbed to 17,400 in the fall of 2010, up nearly 50 per cent since the recession began.
This is really sad people. I have recently been reading this Canadian blog, a financial one and you know, it states that wealthy people in Canada managed to increase their wealth which is awesome. And I am reading about these huge debts. I guess there is only one explanation: it always was and always will be that while some are getting richer, others are getting even poorer. But Canada is the 7th most developed country, therefore, we should expect some global changes in the economy
If we like it or not, the “system” is so engineered that the average Canadian (and American) consumer debt will steadily increase and this for a variety of reasons, the main one being the inability to repay one’s consumer debt and the other being not having to repay it as it is more convenient to repay it (a very little) bit by bit at usurious interest rates!