5 Reasons Why Canada Is in Serious Trouble

Earlier this year, Deutsche Bank’s chief international economist Torsten Sløk circulated a presentation that painted a fairly dire portrait of the Canadian economy. The presentation shows that debt levels are hitting record levels and sky-high home prices are cooling off, increasing pressures on the Canadian financial system and labour markets.
Let’s take a look at the five most important headwinds facing the Canadian economy today.

1. Canadian household debt is higher than ever

In the early 1990s both U.S. and Canadian households started to take on an ever-increasing amount of debt. Starting at roughly 80% in 1990, household debt increased to 125% of household income in both countries by 2009. After the financial crisis, however, U.S. household debt to income decreased dramatically to its current level of 100%. Canadian household debt continues to increase dramatically to today’s nosebleed level of 150%. With the U.S. economy still reeling from its massive deleveraging cycle, Canada’s economy has the potential to be even worse.  (more)


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