Growing Number of Canadians Unprepared For Financial Emergency
September 8, 2014 9:55 PM Subscribe
According to the Annual BMO Rainy Day Survey released today, "the percentage of Canadians that have enough savings to only cover one month or fewer has climbed to 27% - up 8 percentage points [since 2012]. For those who have one month or fewer in savings, the average fund is only $2,051. …. Three-in-ten Canadians are living paycheque to paycheque or spending more than they earn". The Huffington Post Canada reports that "[t]his comes at a time when Canada's support structures for the unemployed are growing thinner. Recent estimates show that little more than a third of Canadians who lose their jobs now qualify for Employment Insurance."
Isn't this more a 'feature' rather than 'bug' of the current government's domestic economic strategy?
Cow and create a whole powerless class of people so insecure, frightened for their futures and baffled that when elections come they'll vote 180º out of phase with their long-game collective self-interest.
The opposition can't form a bloc because they're all too busy lining up for pay-day loans and can't even conceive of how they're going to get to next year, let alone exercise the vision of what life could be like a decade forward.
posted by isopraxis at 10:47 PM on September 8, 2014 [1 favorite]
Cow and create a whole powerless class of people so insecure, frightened for their futures and baffled that when elections come they'll vote 180º out of phase with their long-game collective self-interest.
The opposition can't form a bloc because they're all too busy lining up for pay-day loans and can't even conceive of how they're going to get to next year, let alone exercise the vision of what life could be like a decade forward.
posted by isopraxis at 10:47 PM on September 8, 2014 [1 favorite]
I wish they would define "savings". Excludes RSPs? (Probably not, as they are thought of long-term assets; accessing those funds in an "emergency" involves a tax hit.) Excludes or includes tax-free savings accounts? There are likely a lot of people of decent net worth who look "poorer" than they are by this analysis because of a restrictive definition of savings. I've seen some financial planning case studies printed in the tony business sections of Canadian papers where absurdly well-off people may not have that much "cash on hand". Oh noes!
It's quite ironic, in this age of "just use credit", to imply that having credit available to use in an "emergency" is not good enough when you have other assets that are not as fungible. Such emergency needs should really be the main reason that credit exists.
None of which is to diminish whatever portion of a study like this addresses poverty, as such.
So I am arguing here against the rhetoric used by financial institutions that says, no matter how you have your finances set up, there's always some new problem. Let's examine wealth, not some subset of "savings", to determine people's financial well-being. The rest is just marketing ploys that alternately sell you credit and then another time seek new deposits.
posted by sylvanshine at 10:51 PM on September 8, 2014 [2 favorites]
It's quite ironic, in this age of "just use credit", to imply that having credit available to use in an "emergency" is not good enough when you have other assets that are not as fungible. Such emergency needs should really be the main reason that credit exists.
None of which is to diminish whatever portion of a study like this addresses poverty, as such.
So I am arguing here against the rhetoric used by financial institutions that says, no matter how you have your finances set up, there's always some new problem. Let's examine wealth, not some subset of "savings", to determine people's financial well-being. The rest is just marketing ploys that alternately sell you credit and then another time seek new deposits.
posted by sylvanshine at 10:51 PM on September 8, 2014 [2 favorites]
("Probably not" -> "Probably"!)
posted by sylvanshine at 11:00 PM on September 8, 2014
posted by sylvanshine at 11:00 PM on September 8, 2014
I thought I would throw in that 20% of kids in British Columbia live in poverty.
posted by Nevin at 10:59 PM on September 8 [+] [!]
While we're throwing in, The Harper Government's ritual disembowelling of the census means we don't actually have any idea how many kids live in poverty, except to say that there are almost certainly more than the official statistics.
posted by Homeboy Trouble at 11:18 PM on September 8, 2014 [2 favorites]
posted by Nevin at 10:59 PM on September 8 [+] [!]
While we're throwing in, The Harper Government's ritual disembowelling of the census means we don't actually have any idea how many kids live in poverty, except to say that there are almost certainly more than the official statistics.
posted by Homeboy Trouble at 11:18 PM on September 8, 2014 [2 favorites]
I wish they would define "savings".
Well sure, but anecdotally, I am surprised the number is as low as it is. The bulk of people I know carry a credit card balance because they can't afford to repay it all, not because they have three months pay stashed away in a term deposit.
posted by bystander at 1:09 AM on September 9, 2014 [1 favorite]
Well sure, but anecdotally, I am surprised the number is as low as it is. The bulk of people I know carry a credit card balance because they can't afford to repay it all, not because they have three months pay stashed away in a term deposit.
posted by bystander at 1:09 AM on September 9, 2014 [1 favorite]
I remember when we called things by their real names and we collected UNemployment insurance.
posted by Meatbomb at 2:53 AM on September 9, 2014 [2 favorites]
posted by Meatbomb at 2:53 AM on September 9, 2014 [2 favorites]
Yeah, i think this might be overstating it a bit. Certainly some people are living paycheque to paycheque and don't have a sufficient buffer, but amongst the financially savvy and middle/upper-middle class, at least some are going to look at the wisdom of holding $50k in a savings account earning zero interest vs investing that same $50k elsewhere while being pre-approved for a $50k line of credit in the event of a multi-month financial emergency, which costs nothing until you actually start drawing from it.
posted by modernnomad at 3:14 AM on September 9, 2014
posted by modernnomad at 3:14 AM on September 9, 2014
Recent estimates show that little more than a third of Canadians who lose their jobs now qualify for Employment Insurance.
Which has nothing to do with how much more restrictive the EI rules are about what jobs you are required to take (further away, less money) and the length of time you are entitled to it.
posted by jeather at 5:55 AM on September 9, 2014
Which has nothing to do with how much more restrictive the EI rules are about what jobs you are required to take (further away, less money) and the length of time you are entitled to it.
posted by jeather at 5:55 AM on September 9, 2014
Canada has a housing bubble too huh? Just like Australia - Is your Prime Minister is also a pernicious shithead?
Our Prime minister is preparing Australians for the coming recession by actively punishing people on low income, while making life just that bit tougher for the normal working schmo.
Things like..
introduce a US style higher education system to saddle graduates with heavy debt (but not women, because they are only nurses and teachers and those degrees don't cost very much, so women will be OK [Warning - execrable turd speaking])
Wants unemployed people under 30 to receive NO unemployment benefits for six months for some reason. No seriously, the reason is sound and it's... to give themselves the best chance of getting a job and remaining connected with the labour market - given that they won't have a phone /place to live/ bus fare to a job interview / clean clothes for the interview/ nor money to apply for the 40 jobs a month they have to at risk of having the embargo lengthened by one month. But if you're a day over 30 you'll be fine - just goes to show what a well thought through policy it is.
Wants to send a "price signal" to the poor to stop using doctors, because they're using doctors too much and as some rich guy says. While another rich guy on another stacked panel says that renewable energy is just too damn, well, renewable and too much renewable energy drives down the price of electricity and impacts of the coal fired generators. No fair, power companies should be able to gouge the Australian public just as much as every other company seems to.
Repealed legislation that forced those pillars of society - financial advisors to act in the interests of their clients (yeah, seriously).
There is actually a lot more - don't get me started on the environment and their plans for the barrier reef/ carbon pollution abatement / sovereign wealth fund.
Indeed, the new Australian government is actively campaigning against the interests of the Australian people, and is governing exclusively for a very select group of rich party donors and an Indian mining magnate - oh, and some geriatric media baron who now lives in New York.
But it's OK because ... look over there >>> JIHADISTS >>> Australian JIHADISTS, and see, they are on welfare says Mr Murdoch
Next recession is going to be a doozie, but I'll be OK, payday is this Thursday.
posted by mattoxic at 6:16 AM on September 9, 2014
Our Prime minister is preparing Australians for the coming recession by actively punishing people on low income, while making life just that bit tougher for the normal working schmo.
Things like..
introduce a US style higher education system to saddle graduates with heavy debt (but not women, because they are only nurses and teachers and those degrees don't cost very much, so women will be OK [Warning - execrable turd speaking])
Wants unemployed people under 30 to receive NO unemployment benefits for six months for some reason. No seriously, the reason is sound and it's... to give themselves the best chance of getting a job and remaining connected with the labour market - given that they won't have a phone /place to live/ bus fare to a job interview / clean clothes for the interview/ nor money to apply for the 40 jobs a month they have to at risk of having the embargo lengthened by one month. But if you're a day over 30 you'll be fine - just goes to show what a well thought through policy it is.
Wants to send a "price signal" to the poor to stop using doctors, because they're using doctors too much and as some rich guy says. While another rich guy on another stacked panel says that renewable energy is just too damn, well, renewable and too much renewable energy drives down the price of electricity and impacts of the coal fired generators. No fair, power companies should be able to gouge the Australian public just as much as every other company seems to.
Repealed legislation that forced those pillars of society - financial advisors to act in the interests of their clients (yeah, seriously).
There is actually a lot more - don't get me started on the environment and their plans for the barrier reef/ carbon pollution abatement / sovereign wealth fund.
Indeed, the new Australian government is actively campaigning against the interests of the Australian people, and is governing exclusively for a very select group of rich party donors and an Indian mining magnate - oh, and some geriatric media baron who now lives in New York.
But it's OK because ... look over there >>> JIHADISTS >>> Australian JIHADISTS, and see, they are on welfare says Mr Murdoch
Next recession is going to be a doozie, but I'll be OK, payday is this Thursday.
posted by mattoxic at 6:16 AM on September 9, 2014
This could have an interesting impact on/interplay with the housing market in Canada. We already have one of the most overvalued housing markets in the world and home ownership rates are around 70 percent. I'd be interested to know what percentage of cash-strapped people are condo buyers who've bought into the promise of amazing returns, practically guaranteed because a housing crash like the US in 2008 can't happen with banks so solid that they never need bailouts (except when they do) and so you should put even last penny you've got into mortgage payments.
If that's the case - that the 27% is a mix of the truly poor and an increasing number of the house-rich-but-cash-poor - it means that each economic bump has the potential to produce a bunch of people who can't make their next mortgage payment and might have to foreclose or panic-sell. It could make for a wild ride.
posted by clawsoon at 6:37 AM on September 9, 2014 [1 favorite]
If that's the case - that the 27% is a mix of the truly poor and an increasing number of the house-rich-but-cash-poor - it means that each economic bump has the potential to produce a bunch of people who can't make their next mortgage payment and might have to foreclose or panic-sell. It could make for a wild ride.
posted by clawsoon at 6:37 AM on September 9, 2014 [1 favorite]
Well, it's a survey released by a bank, so naturally they're going to encourage people to put more cash into savings accounts - savings accounts wonderful for a bank. The interest rate paid to the saver is pathetic, and the bank gets more liquid cash to leverage into other products. Depositors' money is the lifeblood of a bank... you can offer all the fancy credit or investment products you want, but at the bottom of it all, if you want to be a bank you really need people to give you money. It's pretty much the whole definition of "bank". So this "survey" is more of an advertisement than anything else.
posted by Mary Ellen Carter at 6:41 AM on September 9, 2014
posted by Mary Ellen Carter at 6:41 AM on September 9, 2014
Mary Ellen Carter: Depositors' money is the lifeblood of a bank... you can offer all the fancy credit or investment products you want, but at the bottom of it all, if you want to be a bank you really need people to give you money.
Does the zero reserve requirement for Canadian banks have any impact on how much they care about deposits?
posted by clawsoon at 6:59 AM on September 9, 2014
Does the zero reserve requirement for Canadian banks have any impact on how much they care about deposits?
posted by clawsoon at 6:59 AM on September 9, 2014
Canada has a housing bubble too huh? Just like Australia - Is your Prime Minister is also a pernicious shithead?
They're better characterized as soulless ice weasels.
Canada's conservative government has been around since 2006. They share tips and tricks with the Tories in Britain, and, most recently, with Abbott's Liberals in Aus. They all compare notes about how to be the best fuckers possible (I believe the UK Tories' election manager is an Aussie).
It's an axis of weasels, really.
posted by Nevin at 7:38 AM on September 9, 2014 [2 favorites]
They're better characterized as soulless ice weasels.
Canada's conservative government has been around since 2006. They share tips and tricks with the Tories in Britain, and, most recently, with Abbott's Liberals in Aus. They all compare notes about how to be the best fuckers possible (I believe the UK Tories' election manager is an Aussie).
It's an axis of weasels, really.
posted by Nevin at 7:38 AM on September 9, 2014 [2 favorites]
Yes, mattoxic, our prime minisfer is also a pernicious shithead.
posted by chapps at 8:07 AM on September 9, 2014
posted by chapps at 8:07 AM on September 9, 2014
Is your Prime Minister also a pernicious shithead?
Oh yeah.
posted by Bearman at 10:01 AM on September 9, 2014 [1 favorite]
Oh yeah.
posted by Bearman at 10:01 AM on September 9, 2014 [1 favorite]
Brian Mulroney was on the The House the other day saying all sorts of nasty things about Harper. I must admit that I am a huge Brian Mulroney fan. I think he is our most underrated and needlessly maligned prime minister. In regards to national unity, his heart was in the right place. And his government actively worked to protect the environment... and jobs.
posted by Nevin at 11:09 AM on September 9, 2014
posted by Nevin at 11:09 AM on September 9, 2014
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posted by Nevin at 9:59 PM on September 8, 2014 [2 favorites]