Canadians Saving Record Cash Piles Amid Covid-19

[Economy 52,914]

https://www.bnnbloomberg.ca/pent-up-consumer-demand-could-explode-when-economic-clouds-clear-devlin-1.1524212

 

Canadians Cash reserves has increased $170 Billion amid the pandemic as people spend less on restaurants and going out and also focus on saving money in case things were to get worse.

 

Generous Government measures and stimulus checks like the CERB benefit program also helped maintain household balance sheets in tact

 

However as one might expect these financial improvements are not proportional by class... The middle class and upper-middle class saw the most improvement as people's blue collar or factory jobs or office jobs remained intact while they cut spending going out

 

Lower income Canadians in service and retail sector which saw the most job losses and hour cuts on the flip side have largely missed out on this financial improvement with some individuals finances actually getting worse if they did not qualify for government aid

[GagaSine 7,464]

The thing is i’m scared of the tax returns next year because I received CERB despite trying to just apply for regular EI, I am saving pretty much all my money so I don’t get screwed.

Hopefully when things become more stable/safe this will result in a little economic boost bc people will spend more?

[Economy 52,914]

On 11/18/2020 at 9:47 PM, GagaSine said:

The thing is i’m scared of the tax returns next year because I received CERB despite trying to just apply for regular EI, I am saving pretty much all my money so I don’t get screwed.

Hopefully when things become more stable/safe this will result in a little economic boost bc people will spend more?

Was CERB ur only income for the year? If so the taxes Hopefully shouldn't be too high

 

CERB benefits are counted as regular income for tax purposes so how much u will pay in taxes on it depends on what income bracket u fall into.

 

Someone who made $100,000 for the year as a whole will pay back over a third of their CERB if they received any. Someone who made like 20K will probably pay like 15% back tops

 

 

[ilocorB 548]

I am not one of these canadians... i’m so poor lol the only income i had this year is cerb for students and loan and bursaries from my province.

[Luc 4,776]

For future stimulus checks governments should implement something like a special card with the stimulus money on it, but that it can only be used for a certain amount of time. Because saving money like this could get us into a double-dip recession.. They better spend that money when they get vaccinated.

 

My government never gave away any stimulus checks (only for businesses proportional to loss of sales volume to avoid people getting fired) and I've somehow been spending more since Covid 

[Economy 52,914]

On 11/20/2020 at 6:26 PM, ilocorB said:

I am not one of these canadians... i’m so poor lol the only income i had this year is cerb for students and loan and bursaries from my province.

Yeah. These are averages and a generalization but individual circumstances vary and as the article points out the middle class and upper middle class are the ones more likely to be in better fincial circumstances from reduced spending while their jobs and income haven't been as affected

 

The service and retail sector is the hardest hit and low income earners in those jobs or students that work those jobs are the most affected and despite CERB helping some, those that didn't qualify in these jobs end up being worse off.

 

So yes there naturally are ppl worse off too. It's definitely not everyone whos finances improved

[Economy 52,914]

On 11/20/2020 at 6:35 PM, Luc said:

For future stimulus checks governments should implement something like a special card with the stimulus money on it, but that it can only be used for a certain amount of time. Because saving money like this could get us into a double-dip recession.. They better spend that money when they get vaccinated.

 

My government never gave away any stimulus checks (only for businesses proportional to loss of sales volume to avoid people getting fired) and I've somehow been spending more since Covid 

Tbh tho in a way it's a good trend to see. Canadians had one of the very highest consumer debt loads in the world (surpassing USAs 134% of income record hit in 2007 at 178% in Canada) and few savings and often cited as a risk for a financial meltdown

 

Canadians in turn also have one of the highest net worths in the world but most of that is in expensive real estate where people live so it's not a quick and easily liquid able asset

 

So the much higher savings at least put us in a more sustainable path consumer finances wise

 

My biggest concern is the government wasn't half as generous with helping businesses as they were with consumers and a huge number of small businesses especially restaurants are going bankrupt (40% to 60% in expensive to rent cities like Toronto) according to many estimates.

 

When covid goes away that's a lot of capacity gone that won't come back quickly even if ppl spend again because a company can't hire back staff if they no longer exist. And new business start ups and old businesses growing to replace lost capacity from bankrupt ones is a process that takes a long time (usually up to several years)

 

We could also see high inflation in these sectors specifically as supply of services like restaurants is cut in half and can't meet demand. The restaurants that do survive for a while will be able to charge WAY more