Most of us are aware that Canadian households have reached record levels of indebtedness over the last few years. Household debt in Canada is now over $2 trillion and household debt to disposable income ratios in Canada are now at 170 percent. Less discussed is what has happened to savings. While low interest rates have been a factor in Canadians being able to carry substantially larger debt burdens, they have also been a factor in reducing the interest income from saving and as a result have led to a drop in the number of savers.
The Bank of Canada rate dropped from 6 percent in 2000 to 0.75 percent in 2015. Over the same period, the total number of savers in Canada as reported by Statistics Canada from data compiled from Income Tax returns (Table 1110036 - Canadian savers, by savers characteristics, annually) dropped from 4,808,930 to 3,356,840 – a decline of 30 percent. Over the same period, the median annual interest income of Canadians fell from $400 to $230, a drop of 43 percent.