Warnings about Canadian debt load are overblown: study
Posted May 23, 2015 8:16 am.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – A new study by the Fraser Institute says the warnings about Canadian’s debt load are overblown because it doesn’t take into account increased assets.
The report says debt figures don’t take into account the $10-trillion Canadians hold in assets. But Jeffrey Schwarz with Consolidated Credit Counselling says increased assets still have to be viable assets.
“Perhaps your assets are increasing in value and that is worth going into debt for because you are going to end up in a better position having gone thru that but what happens if that is not always the case and your assets aren’t always increasing and your net worth isn’t going up,” he explains.
Schwarz says even though some Canadian’s assets are increasing, that’s obviously not the case with everyone.
“The other Canadians [who] are going into debt, are they putting that money that they are going into debt for to good use to improve their financial position or are they using the money that they are going into debt for everyday things or depreciating assets which they are not going to get value out of.”
Between 2010 and 2014, household debt grew 21 per cent to $1.8 trillion mainly on the backs of credit cards and mortgages.
The report was roundly criticized by financial experts across the country.
