Canadian Wealth Set To Plunge?
Canadians’ wealth to plunge
Overall, Canadians’ standard of living is set to drop 3.5% this year after shrinking 0.5% in 2008, said Dale Orr, head of Dale Orr Economic Insight. Moreover, he added, Canadians’ level of income is set to drop to below 2007 levels by the end of next year.
“We are not likely to completely catch up,” said Mr. Orr, about the ability to make up the losses. “We are going to be relatively poorer than we thought we would be.”
In 2008, according to Statistics Canada, Canadians were less productive than in the prior year, with labour productivity — the output per hour worked — contracting 1.1%, the first annual decline since 1996. In comparison, U.S. productivity last year rose 2.7%.
The poor productivity, coupled with rising unemployment, means a lower standard of living for the average Canadian, Mr. Orr concluded.
He estimates that by the time the recovery loses steam, in 2013, Canadians on a per capita basis will have lost the equivalent of one year’s worth of income.
Further, Canadians’ standard of living is expected to be at roughly 85% of the U.S. standard — only a notch better than the 84% prior to the onset of the recession, which is expected to take a heavier toll on the United States.
And, to make matters worse:
The Harper government’s global warming targets for reducing greenhouse gas pollution could wind up costing Canadian households up to $4,000 per year in additional living costs if they do not change their consumption habits, says a new report released by an advisory panel on Thursday.
The report, Achieving 2050: A carbon pricing policy for Canada, noted that such a national system could result in a $1,000 increase in the annual cost of living for the lowest-income Canadians who are making an average of $28,258 per year. The highest income households who make an average of $248,672 per year would see their annual cost of living rise by about $4,000, unless they change habits in their lifestyle which result in greenhouse gas pollution.
The good news is that a survey by HSBC Bank Canada indicates 84% of Canadians have some money put away for the future or an emergency, up from 67% when a similar survey was done in 2006.
Stock up and save.. we’re going to need it in the next few years… thankfully we have the Winter Olympics here is Vancouver, so we’ll be rolling in dough. 
April 16th, 2009 at 5:14 pm
These so called “experts” are less reliable than an Ouija Board. I won’t be laying in bed worrying about these guys two bit guff.
Now as far as the comment stating “thankfully we have the Winter Olympics here is Vancouver, so we’ll be rolling in dough.” Yup, you’ll be rollin in it alright. Right down to the bottom of English Bay. Having a couple of ball and chains does that to just about everyone and everything. We all know that many people in Vancouver think they can walk on water, so it’ll be interesting to see how that works out for them. As far as you go, my suggestion is to head on over to the local scuba shop before it’s to late.
April 17th, 2009 at 5:48 am
I think everyone is going to be poorer than we used to be.
I’m an American, and we’re all “down-sized” here. It has even become verboten to buy luxury items so our big brand stores like Saks and Nieman’s are very quiet these days.
Maybe we’re remorseful that we had all that exuberant spending going on. For those of us that were raised by parents who lived through the Depression, we were taught differently. Warren Buffet learned how to save and conserve too.
Having lived in Canada for years, I think that there never has been big and showy consumption of products up there…so I doubt your downturn will affect you that much.
I love Canadians.