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This is surprising to me. Can this be related to the low salaries compared to equivalent jobs in the US? Is the culture in Canada about taking on debt? From my

This is surprising to me. Can this be related to the low salaries compared to equivalent jobs in the US? Is the culture in Canada about taking on debt? From my limited experience, Canada is somewhat a middle point culturally between US and EU. This aspect (debt) seems to be far closer to the US, at least when compared to northern EU where average debt per family is virtually zero.

abrowne 7y ago
> This is surprising to me. Can this be related to the low salaries compared to equivalent jobs in the US? Sadly, I wouldn't have been surprised had the headline applied to Americans rather than Canadians. Edit: A quick search find similar stories like "6 in 10 Americans don't have $500 in savings" https://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html https://money.cnn.com/2017/01/12/pf/americans-lack-of-saving...
nickelcitymario 7y ago
Anecdotally, as a Canadian, I've long wondered how so many people seem to be able to afford home ownership, multiple vehicles, often a skidoo or ATV or two, a camp or trailer, a boat, annual vacations overseas... Statistically speaking I earn significantly more than the average, yet looking around it seems like most people are living way beyond my means. So is the culture about debt? I don't know, but I wouldn't be surprised if that's the case. My partner and I, when we see people with all these expensive things, have stopped looking at them with envy. Instead, we just think: that's a whole lot of debt right there. I mean, who in their right mind spends $80k on a truck? Yet we see them EVERYWHERE, at least in our neck of the woods.
- atwebb 7y ago
  I mean, who in their right mind spends $80k on a truck? I have the same sentiment, a lot of people buy a payment and auto loans are now 7 (or more) years long which is a lot of the reason you see that. Trucks, at least in the US, are considered work vehicles for tax purposes in some professions such as farming or construction.
  - christocracy 7y ago
    It’s all about the size of monthly payment. Total debt, be damned.
- grawprog 7y ago
  I know what you mean. I regularly see fast food or other low income workers wearing $1000 worth of designer clothing while carrying a brand new iPhone or something, while taking the bus. I see people in my income bracket overspend all the time without really seeming to be bothered by it. Constant vacations, expensive tech, fancy cars things like this. I know as far as vehicles go, a lot of people here seem to lease rather than buy. I know a few people on modest wages who lease brand new cars for a couple years rather than buy an older one or a used one. I also know quite a few people who pretty much live off their credit card. Then, at least in Vancouver here, you get a lot of young people with family money so they'll just kinda bum around on the streets or float from job to job while their parents are paying their bills for them. It's not even just the wealthy people, a lot of middle class or even income families seem to be like this. I remember one day in particular in a corner store, a lady came in behind me from where she'd been panhandling and tried to buy a pack of smokes. She didn't have enough change, so she tried a debit card, that didn't work. So she pulled out a cell phone and called her mom and started screaming at her in the middle of the store about how she hadn't put money in her bank account yet and that she needed to buy something. I left about that time, but it sounded like her mom was about to rush down to the bank for her.
  - eswat 7y ago
    > I regularly see fast food or other low income workers wearing $1000 worth of designer clothing while carrying a brand new iPhone or something, while taking the bus. I always found it interesting that I see more younger people wearing Canada Goose (not during winter), Comme des Garćon, Y-3, etc. in Toronto. Yet this is the city I hear the most from in terms of indebtedness, rising cost of living, being priced out of the city, tough for millennials, etc.
    - grawprog 7y ago
      It's the same way here. Those hunter boots are really popular. I couldn't believe it when I found out how much people pay for a pair of those rubber boots.
- msbarnett 7y ago
  > I mean, who in their right mind spends $80k on a truck? Yet we see them EVERYWHERE, at least in our neck of the woods No small part of that will be because they’re written off as a business expense for mining contractors, assuming Nickel City means you’re near Thompson Same reason Northern Alberta is crawling with F350s
  - nickelcitymario 7y ago
    Sudbury, but same point. You're probably right about a lot of them being written off for work.
  - moltar 7y ago
    Written off != free
scj 7y ago
Over the last decade, the benchmark interest rate in Canada has been under 2%. A lot of people have taken advantage of that.
mschuster91 7y ago
Nothern EU is different, they have oil and welfare states. Germany has 1/3 of households with no money reserves/in debt, 45 super rich people own as much as the poorer half of population.
adventured 7y ago
The Canadian household asset base is overwhelmingly dominated by their housing market. Their households are among the most indebted on earth and in considerably worse shape than the post great recession US households (who went the opposite direction and pushed their debt burdens downward by a lot and haven't reinflated that). Two charts to this point. Housing vs GDP: https://i.imgur.com/NlYEcIT.png https://i.imgur.com/NlYEcIT.png Canadians are far too over-leveraged on their housing. That seems great while housing values are soaring, as in the past (Australia being a recent extreme version of this, now seeing a market crash). When that turns, you get crushed. Household debt to disposable income: https://i.imgur.com/1W9LBqP.png https://i.imgur.com/1W9LBqP.png You can see the Canadian households continued accumulating debt rapidly after the great recession. Household debt to GDP: https://i.imgur.com/pWKqaY7.png https://i.imgur.com/pWKqaY7.png Canadian households took their debt to GDP ratio from ~60% to 100%+ over roughly 20 years. The US household disposable income vs debt service payment figure is at about 9.8%, which is around a 40 to 50 year low (it peaked at 13.2% in 2007). The Canadian figure is now up to around 14.9%. They're being strangled by debt interest costs. Over the last few years, there have been an endless parade of headlines about the extreme debt load of Canadian households: "Canada’s household debt levels higher than any other country, report says" https://www.cnbc.com/2017/11/24/canadas-household-debt-levels-higher-than-any-other-country-report-says.html https://www.cnbc.com/2017/11/24/canadas-household-debt-level...
deleted 7y ago
[deleted]
Phemist 7y ago
The Average of average debt per household as a percentage of yearly income in northern EU countries is 100+% [0]. I myself am from NL and in the red for several times my yearly income. Granted, this is mostly due to high mortgages and thus the debt is offset by a valuable, but non-liquid, asset. Discounting mortgage debt, my experience is that the average household doesn't really get into that much debt; credit card debt is fairly uncommon (but maybe also a taboo subject), whereas it is, as far as I know, pervasive in the US. Anecdotally, I only got a credit card 3 months ago, after I _had_ to ask a friend to book a flight for me because the checkout would _only_ accept credit card, and subsequently the return flight was booked for the wrong date. I haven't used the credit card yet. [0] https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00104 https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&...
- stevesimmons 7y ago
  Dutch attitudes to debt are different from the US, Canada, Australia and UK. Dutch mortgages have historically been very high: mortgage interest was tax deductible, and at one stage Dutch banks would lend you 120%, capitalising the purchase costs and often extra to update the kitchen and bathroom. On the other hand, Dutch personal unsecured debt was very low. Anecdotally, Dutch people don't like purchasing on credit. Partly that's a cultural aversion to debt for consumption. And partly a reflection of the Dutch banking system, which historically charged very high interchange fees for credit cards, hence credit cards had low acceptance by merchants (the biggest Dutch supermarket chain still doesn't accept credit cards, much to the surprise of tourists). Also, when I worked in the Dutch credit card industry (running operations and credit risk for one of the big banks), 80% of the credit cards were actually charge cards, contractually obliged to pay off 100% at the end of each month. Only 20% were able to carry a revolving credit from month to month.

abrowne 7y ago

> This is surprising to me. Can this be related to the low salaries compared to equivalent jobs in the US? Sadly, I wouldn't have been surprised had the headline applied to Americans rather than Canadians. Edit: A quick search find similar stories like "6 in 10 Americans don't have $500 in savings" https://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html https://money.cnn.com/2017/01/12/pf/americans-lack-of-saving...

nickelcitymario 7y ago

Anecdotally, as a Canadian, I've long wondered how so many people seem to be able to afford home ownership, multiple vehicles, often a skidoo or ATV or two, a camp or trailer, a boat, annual vacations overseas... Statistically speaking I earn significantly more than the average, yet looking around it seems like most people are living way beyond my means. So is the culture about debt? I don't know, but I wouldn't be surprised if that's the case. My partner and I, when we see people with all these expensive things, have stopped looking at them with envy. Instead, we just think: that's a whole lot of debt right there. I mean, who in their right mind spends $80k on a truck? Yet we see them EVERYWHERE, at least in our neck of the woods.

atwebb 7y ago
I mean, who in their right mind spends $80k on a truck? I have the same sentiment, a lot of people buy a payment and auto loans are now 7 (or more) years long which is a lot of the reason you see that. Trucks, at least in the US, are considered work vehicles for tax purposes in some professions such as farming or construction.
- christocracy 7y ago
  It’s all about the size of monthly payment. Total debt, be damned.
grawprog 7y ago
I know what you mean. I regularly see fast food or other low income workers wearing $1000 worth of designer clothing while carrying a brand new iPhone or something, while taking the bus. I see people in my income bracket overspend all the time without really seeming to be bothered by it. Constant vacations, expensive tech, fancy cars things like this. I know as far as vehicles go, a lot of people here seem to lease rather than buy. I know a few people on modest wages who lease brand new cars for a couple years rather than buy an older one or a used one. I also know quite a few people who pretty much live off their credit card. Then, at least in Vancouver here, you get a lot of young people with family money so they'll just kinda bum around on the streets or float from job to job while their parents are paying their bills for them. It's not even just the wealthy people, a lot of middle class or even income families seem to be like this. I remember one day in particular in a corner store, a lady came in behind me from where she'd been panhandling and tried to buy a pack of smokes. She didn't have enough change, so she tried a debit card, that didn't work. So she pulled out a cell phone and called her mom and started screaming at her in the middle of the store about how she hadn't put money in her bank account yet and that she needed to buy something. I left about that time, but it sounded like her mom was about to rush down to the bank for her.
- eswat 7y ago
  > I regularly see fast food or other low income workers wearing $1000 worth of designer clothing while carrying a brand new iPhone or something, while taking the bus. I always found it interesting that I see more younger people wearing Canada Goose (not during winter), Comme des Garćon, Y-3, etc. in Toronto. Yet this is the city I hear the most from in terms of indebtedness, rising cost of living, being priced out of the city, tough for millennials, etc.
  - grawprog 7y ago
    It's the same way here. Those hunter boots are really popular. I couldn't believe it when I found out how much people pay for a pair of those rubber boots.
msbarnett 7y ago
> I mean, who in their right mind spends $80k on a truck? Yet we see them EVERYWHERE, at least in our neck of the woods No small part of that will be because they’re written off as a business expense for mining contractors, assuming Nickel City means you’re near Thompson Same reason Northern Alberta is crawling with F350s
- nickelcitymario 7y ago
  Sudbury, but same point. You're probably right about a lot of them being written off for work.
- moltar 7y ago
  Written off != free

scj 7y ago

Over the last decade, the benchmark interest rate in Canada has been under 2%. A lot of people have taken advantage of that.

mschuster91 7y ago

Nothern EU is different, they have oil and welfare states. Germany has 1/3 of households with no money reserves/in debt, 45 super rich people own as much as the poorer half of population.

adventured 7y ago

The Canadian household asset base is overwhelmingly dominated by their housing market. Their households are among the most indebted on earth and in considerably worse shape than the post great recession US households (who went the opposite direction and pushed their debt burdens downward by a lot and haven't reinflated that). Two charts to this point. Housing vs GDP: https://i.imgur.com/NlYEcIT.png https://i.imgur.com/NlYEcIT.png Canadians are far too over-leveraged on their housing. That seems great while housing values are soaring, as in the past (Australia being a recent extreme version of this, now seeing a market crash). When that turns, you get crushed. Household debt to disposable income: https://i.imgur.com/1W9LBqP.png https://i.imgur.com/1W9LBqP.png You can see the Canadian households continued accumulating debt rapidly after the great recession. Household debt to GDP: https://i.imgur.com/pWKqaY7.png https://i.imgur.com/pWKqaY7.png Canadian households took their debt to GDP ratio from ~60% to 100%+ over roughly 20 years. The US household disposable income vs debt service payment figure is at about 9.8%, which is around a 40 to 50 year low (it peaked at 13.2% in 2007). The Canadian figure is now up to around 14.9%. They're being strangled by debt interest costs. Over the last few years, there have been an endless parade of headlines about the extreme debt load of Canadian households: "Canada’s household debt levels higher than any other country, report says" https://www.cnbc.com/2017/11/24/canadas-household-debt-levels-higher-than-any-other-country-report-says.html https://www.cnbc.com/2017/11/24/canadas-household-debt-level...

deleted 7y ago

[deleted]

Phemist 7y ago

The Average of average debt per household as a percentage of yearly income in northern EU countries is 100+% [0]. I myself am from NL and in the red for several times my yearly income. Granted, this is mostly due to high mortgages and thus the debt is offset by a valuable, but non-liquid, asset. Discounting mortgage debt, my experience is that the average household doesn't really get into that much debt; credit card debt is fairly uncommon (but maybe also a taboo subject), whereas it is, as far as I know, pervasive in the US. Anecdotally, I only got a credit card 3 months ago, after I _had_ to ask a friend to book a flight for me because the checkout would _only_ accept credit card, and subsequently the return flight was booked for the wrong date. I haven't used the credit card yet. [0] https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00104 https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&...

stevesimmons 7y ago
Dutch attitudes to debt are different from the US, Canada, Australia and UK. Dutch mortgages have historically been very high: mortgage interest was tax deductible, and at one stage Dutch banks would lend you 120%, capitalising the purchase costs and often extra to update the kitchen and bathroom. On the other hand, Dutch personal unsecured debt was very low. Anecdotally, Dutch people don't like purchasing on credit. Partly that's a cultural aversion to debt for consumption. And partly a reflection of the Dutch banking system, which historically charged very high interchange fees for credit cards, hence credit cards had low acceptance by merchants (the biggest Dutch supermarket chain still doesn't accept credit cards, much to the surprise of tourists). Also, when I worked in the Dutch credit card industry (running operations and credit risk for one of the big banks), 80% of the credit cards were actually charge cards, contractually obliged to pay off 100% at the end of each month. Only 20% were able to carry a revolving credit from month to month.