Canada's Current Federal Debt: 1.2 Trillion
Canada's Current GDP: 1.55 Trillion
Canadians Who Die Each Year Without Healthcare Coverage: 0
Note: Canada operates around an average of 66% Debt/GDP. The only reason it has risen to around 90% in the short term has been Canada's planned, massive ongoing overhaul of it's airforce, coupled with a federally funded plan to completely overhaul and rebuild elementary and high schools, coast-to-coast and. It is fully expected to return to normal soon. Note that until 2015, when those two federal projects began, Canada was operating at 66.6% GDP/Debt. I would be shocked if it doesn't return to that neighbourhood. Maybe 70% at the most.
America's Current Federal Debt: 19.0 Trillion
America's Current GDP: 18 Trillion
Americans Who Die Each Year Without Healthcare Coverage: 45,000
Note: America's debt is expected to reach in the neighbourhood of 20.4 trillion by year's end, without any signs of it getting back under control anytime soon.
Just putting your numbers into context. A temporary spike in the Canadian GDP / Debt ratio was both expected and done with a plan to return to normal.
It turns out that the state of half of US finances, deplorable as it may be is positively shining, not to mention "twice as good", when compared to the country's neighbor to the north, where a recent Ipsos survey on behalf of accounting firm MNP, found that
more than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. Needless to say, if $500 in savings is bad, half that amount is outright bizarre.
“With such a small amount of wiggle room, any kind of unanticipated hardship, such as a job loss or even a car repair, could send an already struggling family into financial despair,” Canada's
Global News quoted Grant Bazian, president of MNP’s personal insolvency practice, which is one of the largest in Canada. He also revealed that for 10 per cent of Canadians, the margin of error when it comes to household finances is even thinner, at $100 or less.
It gets worse as those with anything at all left at the end of the month were in better shape than many:
A whopping 31% of respondents said they already don’t make enough to meet all their financial obligations.
The poll also found that while debt is causing Canadians a fair bit of stress, few appear to be overly worried or on track to buff up their monthly financial cushion. Two-thirds of survey takers said they are “less than very confident” about their ability to create an emergency fund.
And then this hair-raising finding from the survey: "
Roughly 60 per cent said they don’t have a firm grasp of how interest rates affect debt repayments." According to Bazian, the statistic helps explain why many indebted Canadians end up taking on more debt and high-cost loans. “That’s how so many end up in an endless cycle of debt,” he noted. It also explains charts such as this one, showing the harrowing difference surge in Canadian household debt, which has grown by 60% since the start of the century.
According to Global News, the concerning data also raises the question of whether Canadians understand the implications of an interest rate hike by the Bank of Canada. A decision by the BoC to start lifting its key policy rate from historic lows would raise the cost of carrying debt across the country; should rates raise enough Barclays will have to change its caption in the chart above. A one percentage point rise in the BoC’s key interest rate would likely push up variable mortgage rates by a similar amount. A variable mortgage rate that’s currently set at 3 per cent, for example, would go up to 4 per cent, which represents a 33 per cent increase in interest payments for the mortgage holder. That’s an extra $83 a month for every $100,000 in outstanding mortgage debt.
According to a new survey from Manulife Bank, nearly 75% of Canadian homeowners would have difficulty paying their mortgage every month if their payments increased by as little as 10%. And, given that the average house in Canada costs roughly $200,000 and carries a monthly mortgage payment of $1,000, that means that most Canadians couldn't incur and $100 hike in their monthly mortgage payments without possibly going under. Per
CBC:
