Canadians are experiencing a period of robust fiscal health.
According to Environics Analytics, 2013 was a very good year for Canadian balance sheets: net worth was up 7.7% to $442,130, consumer debt was flat, and real estate performed more predictably compared to recent years—increasing a solid 6% over 2012.
Not only are the rich (the top fifth of the populace) getting richer—their net worth increased 8.1% over the previous year—but the poor (the bottom fifth) are feeling more flush, too, with their net worth rising 8.7%.
Although many Canadians still face higher-than-normal unemployment, the latest statistics reveal just how strong the financial rebound has been since the 2008 economic downturn.
Nationwide, the new data indicate that stock portfolios are growing, savings are on the rise, and mortgage debt has ticked up only modestly.
“Overall, 2013 was an excellent year for Canadian balance sheets,” says Peter Miron, senior research associate at Environics Analytics. “Many people benefited from the strong stock market. But they also saved more and didn’t take on more debt—preparing [perhaps] for a rainy day. This was one of the best years we’ve had since the recession.”
Digging into the household debt data reveals some positive trends. In 2013, the growth in Canadian household debt was due entirely to mortgage debt growth of 3.3%. Consumer debt—credit cards, loans and lines of credit—was unchanged from 2012. In fact, the debt-to-disposable income ratio dropped in 2013 to 141.6% from 143.9%.
“Canadians are taking out mortgage debt at the same rate that they’re paying it down,” he says.
However, the deleveraging was not even across Canada, with the debt-to-disposable income ratio dropping fastest in Prince Edward Island, Nova Scotia, New Brunswick and British Columbia and the ratio increasing in Saskatchewan, Newfoundland and Labrador, and Manitoba.
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