Canadian Households Focusing on Retaining Savings and Paying Off Debt, Not Consumption

It appears that an increasing number of Canadians have been focusing on either paying off debt or increasing their savings level amid the pandemic, rather than spend their income.

According to a poll conducted by Nanos Research Group and Bloomberg, three out of four Canadian households said that their main financial priority is to reduce their debt level or maintain a higher level of savings. Only 11% of respondents revealed that they plan to make major purchases. Indeed, since the onset of the economic downturn back in March and April, an increasing number of Canadians’ incomes were left better off, largely due to pandemic-related government support programs, elevated real-estate prices, and stock market growth.

The improvement in personal finances stemmed from numerous income and credit support programs implemented by Prime Minister Justin Trudeau at the beginning of the pandemic, causing the average disposable income to increase by approximately $100 billion in the first nine months of the crisis. In the meantime, household spending dropped by over $50 billion during the same period, resulting in a net $150 billion of new household savings that remained unspent. According to Statistics Canada, the savings rate among Canadian households continued to remain elevated at 14.6% in the third quarter of 2020.

In addition to the surge in savings levels, the ongoing real estate boom has been leaving many Canadians wealthier. According to Statistics Canada, household net worth grew by over $600 billion within the first six months of the pandemic. However, the improvement in household financials has been leaving some government officials worried, with Finance Minister Chrystia Freeland looking at possible ways to unleash spending in order to stimulate the economic recovery.


Information for this briefing was found via Nanos Research, Bloomberg, and Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Tudor Gold x American Creek: Consolidating A Massive Gold Project

Aura Minerals: The Era Dorada Underground PEA

Gold Is Now Smart Money’s End Game | Doug Casey

Recommended

Goliath Resources Closes Out Funding Round With Total Gross Proceeds Of $27.1 Million

Silver47 Kickstarts 4,000 Metre Drill Campaign At Red Mountain Project

Related News

Consumer Spending Data Compiled by the US Bureau of Economic Analysis Significantly Inaccurate

The US federal government has been issuing a monthly report which measures consumer spending. The...

Thursday, June 4, 2020, 01:34:00 PM

US Consumers Delve Into Savings to Keep up With Spending Habits as Incomes Tumble in October

As numerous stimulus programs that were part of the CARES Act ended over the summer,...

Thursday, November 26, 2020, 12:21:00 PM

US Consumer Spending Expectations Soar, Despite Pessimistic Earnings, Income

Despite the less-than-dismal state of consumer finances that is expected to envelope much of the...

Saturday, December 19, 2020, 11:41:00 AM

Canadian Consumer Debt Loads Decreased For First Time in 10 years

As strict stay-at-home orders were imposed and non-essential businesses were forced to temporarily close, many...

Wednesday, June 17, 2020, 05:15:00 PM

US Economic Recovery Hits Standstill After Consumer Spending Declines Once Again

According to consumer spending data compiled by JPMorgan, it appears that the economic recovery in...

Tuesday, August 4, 2020, 03:41:34 PM