Statistics Canada said last month that the rate plummeted to 0.5 per cent in the second quarter. In the U.S., meantime, the personal savings rate stands at minus 0.6 per cent, the lowest level on record.
While the methodology of calculating the rate may be flawed because it doesn't include asset prices, it's been compiled in the same way for decades. Ten years ago it stood at 10 per cent, 20 years ago at 20 per cent — an indication of a significant downwards trend, he said. Moreover, all age groups have seen a steady drop in their savings rate, Mr. Tal said in the report.
(W)hile financial assets, or more liquid assets, have been climbing in recent years, it's been mostly concentrated among older Canadians. At least 40 per cent of Canadian households have no financial savings outside of their personal savings and chequing accounts...
The rise in home prices is well and good, but the lack of any breadth of investment is an extremely dangerous situation which affects far too many Canadians - and a good number of the people without financial savings likely don't have much by way of home investment either. With luck, we'll avoid a '30s-style crash, but that doesn't mean the near-zero savings make for a remotely sustainable economy.
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