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July 29, 2021

Are you doing better or worse than other families?

By Gordon Powers, Sympatico / MSN Finance

The effects of the current economic downturn will be felt around the kitchen table for years to come, predicts the latest Vanier Institute report on the state of families in Canada.

It warns that household spending and debt are rising faster than incomes; that overall debt loads are dangerously high; and that unattached adults are rapidly becoming the country's forgotten poor.

The Vanier report estimates that Canadians’ average debt has risen six times faster than average incomes since 1990, and now stands at a whopping 140% of household disposable income. And, despite the Bank of Canada’s sudden optimism, it seems things are likely to get a lot worse for many families.

In previous recessions, Canadian families offset the impact of job loss by hav­ing women take up more paid employment. This time out, most women are al­ready working which means there’s a much smaller reserve army of labour for families to call upon, says Canadian Centre for Policy Alternatives economist Armine Yalnizyan.

Women have jumped into the work force in record numbers since the fall, either because their retirement savings have been decimated or their partners have lost work. They're having more success than those those partners because they're often more willing to take jobs that many men don't want.

Her study also finds finds that, compared to previous recessions, this one is packing a bigger punch in its early days than any before it. 

What’s worse, adds the Vanier Institute, is how the composition of household net worth has changed over the past decade, with real estate, pensions and stocks now representing more than 80% of household net worth, compared to roughly 50% in the mid-1990s.

This makes the whole basket more volatile than in previous decades, forcing families to keep an even closer watch on what little wealth they do have compared to previous years.

Are you among those who feel they’re one or two paycheques away from being in real trouble? Has somebody gone back to work as a result? Are doing better or worse than most Canadians? Use this tool to see where you stand compared to the rest of the country.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...