Maybe companies are finally ready to take the baton from Canada\u0027s over\u002Dextended households, writes Kevin Carmichael. Read on.
Comparisons with U.S. household debt circa 2007 often are superficial, stopping at the headline numbers. Canadians tend to be far more credit worthy than their American cousins, and historically they’ve tended to prioritize debt payments when things start to get tight, rather than carrying on spending money they don’t have. Financial regulation is also stronger now than it was then, and Canada’s mortgage stress test will have limited the number of households who took on debt they can’t afford.
Indeed, if a recession comes, Canadian households will be facing it with a buffer. The savings rate rose to 5.7 per cent in the third quarter from 5.1 per cent in the second quarter, as disposable income increased faster than spending. That’s a remarkable number because even relatively thrifty Canadian households weren’t stashing away a lot of money ahead of the pandemic: the average savings rate over the decade prior to 2020 was 3.4 per cent, Statistics Canada said.
At the same time, non-financial private corporations are loading up on debt like never before, probably because their owners and managers sensed interest rates would only be going higher. Those companies took out non-mortgage loans worth $36.5 billion in the third quarter and $32.5 billion in the second quarter, the second- and third-highest totals on record.
To be sure, more corporate debt could be another vulnerability. Some economists worry that the low-interest rates have created “zombie firms” that survive off credit lines rather than profits. But with equity markets in turmoil, a jump in non-mortgage loans could signal that companies were keen to raise capital by whatever means was available.
After years of demonstrating a lacklustre commitment to investment, maybe Canada’s companies are finally ready to take the baton from the country’s over-extended households.
المملكة العربية السعودية أحدث الأخبار, المملكة العربية السعودية عناوين
Similar News:يمكنك أيضًا قراءة قصص إخبارية مشابهة لهذه التي قمنا بجمعها من مصادر إخبارية أخرى.
Junkyard confidential: At the heart of a $500-billion global recycling industryCanada Metal \u0026amp\u003B Iron is just one of the businesses that helps recover and recycle 11 million tonnes of metal annually in Canada. Read on.
اقرأ أكثر »
Junkyard confidential: At the heart of a $500-billion global recycling industryCanada Metal \u0026amp\u003B Iron is just one of the businesses that helps recover and recycle 11 million tonnes of metal annually in Canada. Read on.
اقرأ أكثر »
Renters can now apply for one-time $500 housing benefit top-upApplications are now open for low-income renters looking to access the one-time top-up to the Canada Housing Benefit that will see those eligible receive an additional $500. Here's what you need to know.
اقرأ أكثر »
Ottawa to provide one-time $500 rent subsidy for low-income familiesThe Canadian government is rolling out a one\u002Dtime payment of $500 to eligible lower\u002Dincome renters struggling to afford housing. Read on
اقرأ أكثر »
Ottawa to provide one-time $500 rent subsidy for low-income familiesThe Canadian government is rolling out a one\u002Dtime payment of $500 to eligible lower\u002Dincome renters struggling to afford housing. Read on
اقرأ أكثر »
Low-income renters in Canada can apply for a one-time payment of $500 on Monday. Here’s what you need to knowThe federal government is offering a one-time, tax-free $500 top-up to the Canada Housing Benefit program aimed at supporting an estimated 1.8 million low-income renters, including students
اقرأ أكثر »