Snapshot of Canadians’ finances

This is super interesting. Also remember that less than 1% of Canadians work in oil and gas, and less than 20% of Canadians make more than $85,000 a year! It shows how well Alberta is doing.
Jason Heath Jun 30, 2012

Who is the average Canadian — financially speaking? According to the Association for Canadian Studies, our median household income is $68,560 per year. Personal incomes are lowest in Prince Edward Island at $21,620 and highest in Alberta at $36,010. We pay $11,000 per year in income tax, donate $260 to charity, contribute $2,790 to our RRSPs and carry a credit card balance of $3,462. Mortgage and household debt comes in at a total of $112,329

Our net worth per capita has continued to rise, most recently clocking in at $193,500 per capita according to Statistics Canada. Real estate gains have continued to drive the increase to our net worth, though many have suggested the Canadian market could be in for a correction — or at least a pause.

The Toronto Stock Exchange has risen 59% over the past 10 years, compared with a 3% gain for the MSCI World Index and a 4% loss for the S&P 500 (excluding dividends).

Our Canadian dollar has appreciated 47% against the U.S. dollar and 16% against the euro over the past 10 years. This has made global and U.S. stock market returns even worse in Canadian dollar terms.

Canada had a double-digit personal savings rate in the ’90s, but over the past two decades, this has dropped dramatically to the current 3.1% — one of the lowest savings rates of all OECD countries. The flipside of this coin is that our current personal debt to income has simultaneously reached an all-time high of 153%. So gains in real estate and stocks have been tempered by a corresponding increase in personal debt.

The Economist Intelligence Unit lists Canada’s government debt per person at about US$39,883 or 81.6% of GDP. This compares with the U.S. at $37,953 or 76.3%. Go figure! That said, Greece’s public debt is currently $35,874 or 141.0% and Japan is at $87,601 or 204.9%.

Canada’s federal government has been consistently posting budget surpluses of about 1% of GDP since the mid-1990s, a time when many people thought Canada was on the path to a sovereign debt crisis of its own. Quite to the contrary, Canada entered and emerged from the 2008 recession relatively unscathed. And this is the asterisk beside Canada’s 81.6% debt-to-GDP ratio when compared with the 76.3% figure for the U.S. — given our neighbours are currently spending US$1.50 for every US$1 of federal revenue. Call it a “Tale of Two Countries.”

Some people suggest the U.S. and Europe could learn something from the Canadian government debt experience of the 1990s. While many people in other Western countries are now suffering as a result of their government’s debt problems, our government is sitting pretty. Our personal debt is the one black spot for the red and white as we celebrate our country’s birthday.

Jason Heath is a fee-only Certified Financial Planner (CFP) and income tax professional for Objective Financial Partners Inc. in Toronto

Has the US housing market hit bottom?

This is a copy of the blog from Boris – the president of MERIX bank – a broker bank we love and deal with often. It is worth pasting all of it here AND it is good news!

Article written by on the 17 Jul 2012 in Current Events

US Housing Market Near End?I’m referring to the real estate market in the U.S.  There have been some signs that real estate market may have reached the point where you can actually see the bottom.  Interesting to note that new home construction is up in many regions of the U.S.  Drive through parts of Florida and you’ll be surprised by the number of new homes being built.  Another sign is the number of pending sales just recently reported.  On a year over year basis, pending sales were up 14.5% in the West, 22.1% in the Midwest, 19.8% in the Northeast and 11.9% in the south.  Another sign that real estate market is getting better is due to increased foreclosures. Read More

Rates to hover for 1 year; till June 2013.

This is good news. But remember, the market is smart and will start to increase bank and lending rates before in anticipation of the Band of Canada’s rate increase.

AND this does NOT mean that fixed rates will not increase. They are set by the prices of the bond market not the government. This only says the government will leave the Prime rate as is, which as been at 3% for about 2 years now. Read More

Tax Freedom Day was June 11th!

First posted: Tuesday, June 12, 2012 06:46 PM MDT | Updated: Tuesday, June 12, 2012 07:59 PM MDT

The federal government expects a deficit of $21 billion this year. (Chris Roussakis/QMI Agency)

 

If you’ve ever tried to calculate all the taxes you pay in a year to all levels of government, you’ve probably given up somewhere along the way. Read More

Interest Rates to go up soon – the boring data

Here is a sample of the boring data we read every day to see where rates are going. Way down in paragraph 6 he notes the Bank is getting ready to raise interest rates and the reasons why they have not yet. All this means the 10 year at 3.89% looks ever better now. Possibly even trade in the variable rate at Prime -.8% to get the secure future of low payments for 10 years! Now could be the time. If you are losing sleep – this may be a good idea. Mark Carney, the Governor of The Bank of Canada, delivered a speech to the Greater Kitchener-Waterloo Chamber of Commerce in Kitchener-Waterloo, on Monday, April 2, 2012. - Mark Carney, the Governor of The Bank of Canada, delivered a speech to the Greater Kitchener-Waterloo Chamber of Commerce in Kitchener-Waterloo, on Monday, April 2, 2012. | Deborah Baic/The Globe and Mail

Carney raises outlook for economy, issues dollar warning

JEREMY TOROBIN

OTTAWA— Globe and Mail Update
Published Wednesday, Apr. 18, 2012 10:35AM EDT
Bank of Canada Governor Mark Carney lifted his projections for the economy for each of the first three quarters of 2012 in a new forecast Wednesday – and took an intriguing step toward clearing the path for higher interest rates by apparently seeking to unhinge the Canadian dollar from oil prices.

At a news conference in Ottawa after releasing his forecast, Mr. Carney seemed to employ a tactic known as “jawboning,” used when officials try to cool speculators’ enthusiasm for the dollar (CAD/USD-I1.01-0.0005-0.05%), saying that trading the currency as if it will always rise in tandem with global oil prices (CL-FT102.74-1.46-1.40%) is a “recipe for losing money.” Read More

More problems with collateral mortgages

Here is more bad news on collateral mortgages.

People refuse to sign a 3 year cell phone contract but then for some reason have no problem in losing every  single thing you have ever made and be sued into bankruptcy by your bank for taking one of these mortgages. Again, we do not offer them but TD, Scotia, ING, and RBC have them as STANDARD. I would rather take a new 3 year cell phone contract! Read More