Canada’s national household debt has risen to 163.7 percent as more and more people lose their jobs.
Canadians are falling into debt at an alarming rate as the downturn persists. Household debt in the country has ballooned to 163.7 percent, meaning for every dollar of income, the average Canadian owes $1.64, according to Stats Canada.
Meantime, the price of oil continues to fall, dipping below $35 per barrel on Monday, December 14, 2015 before closing at $36.31.
The story is not much brighter in the oil patch, where corporate spending has been freefalling.
Thousands of people have been laid off across the oil and gas sector. Encana alone has let go of 600 staffers, and the company’s newest projections show it plans to spend $600 million less in 2016 that it did in 2015.
Calgary’s Credit Counselling Society says laid off workers are are going to face a serious cash crunch.
“Over the long term, I don't think people will maximize what they got as a severance package,” said Mark Kalinowski, Credit Counsellor with the Credit Counselling Society. “I think this will become a bigger problem as people start to use credit to cover their mortgages, gas, groceries and things like this.”
The only place showing job growth is the non-profit sector as more Calgarians rely on charity to survive. Calgary Accessible Housing leases a nine person office space which is now packed with 19 employees. The director looked for a bigger office but was shocked to find that rental rates are still too high.
“We found there was no savings, no meaningful savings we could tie into at this stage, lots of office space, great options, but the rates are still very, very high,” said Jeff Dyer.
As for the economy, the Bank of Canada has cut its key interest rate twice this year in order to stimulate the economy, but has also tightened rules on mortgages to try and cool the housing sector.
