AM 1150 Kelowna - Radio Rallies & Reversals

You may have heard this yesterday already, but I think it's worth repeating: according to the Canadian Payroll Association, 59% of Canadians are living paycheque-to-paycheque, and would be in trouble if their paycheque was delayed by one week. This is the same number reported same time last year when the economy was in a recession. According to Statistics Canada, the recession in this country started in Q3 of 2008 and ended in Q3 of 2009, but why doesn't it feel like it for 60% of Canadians.

Yesterday's release of the National Balance Sheets accounts showed that household debt-to-GDP now stands at 94.2%, and debt-to-personal disposable income is at 146% (which is 20% higher than in the US). The OECD points out that most of this debt is mortgage debt, and that their models show Canadian home prices to be 10-20% overvalued, based on price-to-rent and price-to-income. Other estimates are as high as 40% for markets like Vancouver. There are signs now of growing inventories, a precursor to a bubble bursting, and like in Australia, it's harder for Canadians to 'walk away'.

GB