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Growing Household Indebtedness and the Plummeting Saving Rate in Canada: An Explanatory Note

Published online by Cambridge University Press:  01 January 2023

Mario Seccareccia
Mario Seccareccia*
Affiliation:
University of Ottawa, Ottawa, Ontario, Canada
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Abstract

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Much as it has occurred in the United States, over the last two decades the household saving rate in Canada has fallen sharply to unprecedented levels, as it now hovers essentially about the zero rate. Accompanying this fall, we have witnessed a parallel rise in household debt ratios — a phenomenon that some have dubbed a state of “affluenza”. The object of this article is to provide an explanation of this phenomenon by pointing especially to the role played by fiscal policy in shifting the burden of debt from the government to the household sector. Moreover, the article raises serious concern about the sustainability of this particular growth process.

Type
Current Issues
Information
The Economic and Labour Relations Review , Volume 16 , Issue 1 , July 2005 , pp. 133 - 151
Copyright
Copyright © The Author(s) 2005

Footnotes

*

While absolving them of all responsibilities, the author wishes to thank Ron Bodkin, Leo DeBever, Peter Kriesler, Marc Lavoie, Warren Mosler, Alain Parguez, Pierre Piégay, Henri Sader, Andrew Sharpe, and two anonymous referees for their helpful comments on previous drafts of this paper.

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