Canadians saw their national wealth drop in the last quarter of 2018. The ‘national wealth’ of a single Canadian fell from $304,085 to $296,933. THE CANADIAN PRESS/Graeme Roy

Canadians are getting poorer and are borrowing money

National wealth dropped by more than two per cent to $11.1 trillion, while personal debt rose

Dropping real estate values and natural resource prices have made Canadians poorer.

According to Statistics Canada, the ‘national wealth’ of a single Canadian fell from $304,085 to $296,933 during the last three months of 2018.

This recorded drop reflects a decline of Canada’s national wealth by 2.2 per cent to $11.1 trillion at the end of the fourth quarter.

RELATED: 46% of Canadians $200 or less away from financial insolvency: poll

“This was primarily due to a 23.5 [per cent] decrease in the value of natural resources,” the agency said in a report. Weaker crude oil prices in the fourth quarter accounted for the drop. “A decline in the value of residential real estate [down $72.5 billion] also contributed to the fourth quarter decrease, as housing prices continued to edge down.”

Canadians are also borrowing more money relative to their incomes.

The household debt service ratio, which measures payments on the principal and interest of credit market debt as a proportion of household disposable income, rose 14.9 per cent in the fourth quarter, as growth in total debt payments outpaced the growth in disposable income.

RELATED: 731,000 Canadians going into debt to buy prescription drugs: UBC

Overall, the average Canadian owes $1.79 in credit market debt for every dollar that they earn towards their disposable household income.

A 2017 OCED study found that Canadians borrow far more than the rest of the world. It found Canadian household debt exceeded the total value of Canada’s per-capita Gross Domestic Product by one per cent. In other words, the Canadian economy does not produce enough wealth to cover the private household debts of Canadians, leaving one per cent unpaid if all GDP were to go towards that single item.

According to the OCED, higher-than-usual real estate prices accounted for the global debt leadership of Canadians. Worse, Canadians will find it more difficult to recover the value of their debt-fueled investment against the backdrop of declining real estate prices.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Wealth tax needed as gap between rich and poor grows

Cannings: Disparity between super-wealthy and the rest is much greater than previously estimated

Ice coming to Trail arena as hockey season nears

Trail council agreed to install the ice in time for August hockey camps

Traffic finally eases along Arrow Lakes ferry routes

Motorists were stuck for up to six hours in ferry lineups over the weekend

Rossland Art Gallery set to reopen to public

Three Kootenay artists will be featured in the gallery when it opens on July 8

Horrifying video shows near head-on collision on Trans Canada

The video was captured on dash cam along Highway 1

Budget officer pegs cost of basic income as calls for it grow due to COVID-19

Planned federal spending to date on pandemic-related aid now tops about $174 billion

Sexologist likens face mask debate to condom debate: What can we learn from it?

Society’s approach to condom usage since the 1980s can be applied to face masks today, one expert says

B.C. homeowners plead for action on condo insurance crisis

Strata property fees growing bigger than mortgage payments

Indigenous man behind complaint of BC Transplant’s alcohol abstinence policy has died

David Dennis, who is Nuu-chah-nulth, argued that six-month sobriety policy is a ‘lethal form of racism’

ICBC to resume road tests in July with priority for rebookings, health-care workers

Tests have been on hold for four months due to COVID-19

Urge travellers to follow COVID-19 rules in a ‘gentle way’: B.C.’s top doctor

Cases surging in the U.S. have B.C. officials hoping the border stays shut all summer

96-year-old woman scales B.C. butte with help of family, friends

‘I did as I was told and I enjoyed every minute of it’

Most Read