We’re very lucky to have as talented a person part of our family at The Cornwall Free News as Roger Sauvé of People Patterns Consulting.
Roger, through the Vanier Institute for the Family releases a yearly report which went live recently. LINK
“The numbers show that most families haven’t felt much relief from the recovery that is technically underway in the economy, says the report from the Vanier Institute of the Family.
“No one should conclude that recession worries are over in the homes across Canada,” says the report, written for the institute by Roger Sauve of People Patterns Consulting.
“From a household perspective, there will continue to be high unemployment for sometime, income growth will remain weak, and there is an urgent underlying need for many families to repair and/or strengthen their household balance sheets,” it says.
“For far too many, there is too little income, too much spending, too little saving and too much debt.”
The report notes that the number of Canadians working peaked in October 2008. From then until the economy hit bottom last July, 410,000 jobs disappeared – and few of those jobs have been recovered.
“The average debt per household hit $96,100 in the third quarter 2009 or $87,200 if only consumer debt and mortgage debt are included,” it says. “Both are at new record highs. Total debt per household advanced 5.7%.”
Roger was very busy today giving out interviews to media sources across Canada. LINK – Hopefully he’ll share a bit more about his fascinating work in his next piece for us?
Sauve, along with other family experts like Clarence Lochhead, executive director of the Vanier Institute for the Family, say parents are taking on too much debt while at the same time they are raising the first generation of kids who are spending money without actually seeing it.
“Kids are getting bank cards and credit cards as early as 16, and they’re spending their parents’ money without even seeing it. There is no actually dollars, or paper money, being handed over,” says Lochhead.
HIGHLIGHTS OF THE FAMILY FINANCES REPORT – February 16, 2010
Ø The recession came and a recovery now seems to be underway – The global economy was hit hard. Canada was hit hard. Canadian households were hit hard. It seems that the economy is now in a slow recovery. Even so, many challenges remain.
Ø Households faced difficult recession realities – Employment fell sharply, aggregate wages shrank, net worth dipped, households held back and saving has come back in dramatic style. Bankruptcies and arrears climbed.
Ø Average debt loads climbed to $96,100 in 2009 – In contrast to past recessions, households continued to borrow more this time. The debt to income ratio jumped to a new high of 145%. Under one scenario, some 1.3 million households could have a vulnerable or dangerously high debt service load by the end of 2011.
Ø Housing prices likely in a bubble – House prices in October-November 2009 increased to about $340,000, equal to 5 times the average after tax incomes of Canadian households. The long-term average is 3.7 times. Higher interest rates, possible changes in mortgage terms, more new listings and the realization that current prices are unsustainable may cause the bubble to burst.
Ø The 2000s was a decade of debt while the 1990s was a decade of sagging savings – In the 2000s, asset growth was less than half the pace of the 1990s while the growth in debt was twice as rapid. The opposing trends for assets versus debt brought about a much reduced growth in wealth in the 2000s. The 1990s were a decade of sagging savings.
Ø Poverty on the rise and the rich get a growing piece of the pie – Poverty levels jumped during each of the last two recessions and are likely doing so now. Only the richest fifth of families increased their share of total family incomes … the rest got less over the last two decades.
Ø Special report on household spending in the 2000s decade – Out of pocket medical expenditures far outpaced all other major group of expenditures. At the detailed level, pet care grew the fastest and child care expenses at home declined the most. The recession contributed to a 6% dip in personal income tax payments.
Click his banner below to find out more about Roger or to contact him for more information.