Evidence of meeting #32 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was households.
A recording is available from Parliament.
Conservative
The Vice-Chair (Jasraj Hallan) Conservative Jasraj Singh Hallan
Thank you.
This concludes round one.
In round two, we have Pat Kelly starting off for five minutes.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Thank you, Chair.
This is for the superintendent.
We had testimony in the last week that credit is growing, that indebtedness is increasing and that people are dealing with their higher debt service costs by depleting their savings and refinancing existing debt. In other words, they are stretching the problem over a longer period of time, compounding it in the long term. They are also cutting back on consumption, including necessities. We have just seen a jobs report with a loss of 108,000 full-time jobs in the last month for which we have data.
Are you concerned that as unemployment rises and as debt service costs and the debt burden rise, this may affect the solvency of Canadians?
Superintendent of Bankruptcy, Office of the Superintendent of Bankruptcy
The conditions are ripe for this to affect the solvency of Canadians.
Reputable credit counsellors can be there to help them budget before they have to find an insolvency solution. The insolvency system is there to provide them with the tools and resources for a fresh financial start, but yes—
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
If I may, all the counselling in the world isn't going to allow a person who has lost their job, who has taken on debt because of the increased cost of living.... This isn't a matter of people's financial literacy. This is a matter of loss of income.
Superintendent of Bankruptcy, Office of the Superintendent of Bankruptcy
As I said, job loss is one of the main reasons for insolvency. Certainly, in job loss situations, this is often what we see.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
All right.
Is unemployment likely the key driver in people's inability to make their minimum payment?
Superintendent of Bankruptcy, Office of the Superintendent of Bankruptcy
There isn't one key driver, but it's certainly a major one.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
We also heard that while, in the last year, the overall credit indebtedness of Canadians increased by more than 4%, the number of debtors increased by only a little over 1%. In other words, people are getting deeper in debt. We're not seeing new homebuyers, for example, getting into home ownership. We are seeing existing debtors getting deeper in debt.
Does this concern you as the superintendent of bankruptcy?
Superintendent of Bankruptcy, Office of the Superintendent of Bankruptcy
It's the same category of concern that people are in difficult financial situations and will need to look for an insolvency solution. Where we sit today, with the numbers and the macroeconomic conditions, we are expecting a rise in insolvencies, yes.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Thank you.
For Statistics Canada, I believe that in your opening statement, you said that food is now up to 9% of the average consumer's budget. The Fraser Institute reports that taxes are now 43% of the average family budget. How does housing fit into that, with 43% going to taxes and 9% going to food? Housing is extraordinarily expensive.
Assistant Director, National Economic Accounts Division, Statistics Canada
We don't have precise numbers on the housing side, but it's something we could follow up on. We were quoting details from our household final expenditure series, which includes housing-related expenses, transportation costs—
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
You have a food statistic, but you don't have a housing statistic.
Assistant Director, National Economic Accounts Division, Statistics Canada
There are different items under our household expenditure.
Eric Olson Director, Centre for Housing and Income Statistics, Statistics Canada
We have some slightly older data from 2023, in which the homeowners without mortgages spent about $14,000 on shelter while those with mortgages spent, on average, $38,000 on shelter.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
What about renters? Renters are a large portion of the population.
Director, Centre for Housing and Income Statistics, Statistics Canada
They are a large portion of the population, but they may not be indebted in the same way as with the mortgages.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
I'm sorry. They're not indebted, but they will have non-mortgage debt, and their ability to service the non-mortgage debt will be affected by their rent.
Director, Centre for Housing and Income Statistics, Statistics Canada
Certainly.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Two-thirds of households have significant non-mortgage debt. Is that correct? Did I hear that?
Assistant Director, National Economic Accounts Division, Statistics Canada
We do aggregate numbers. We don't necessarily have counts. We have some information on the number of households with a mortgage. Six million households in Canada have a mortgage.
Conservative
Assistant Director, National Economic Accounts Division, Statistics Canada
Exactly. This is why I'm saying that we don't have precise numbers on our side.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
I only have about 20 seconds left.
I want some clarity on the statistics you discussed with regard to the net-worth quintile and how the top quintile affects the numbers. What is the cut-off? What's the minimum to be in the top quintile?
Conservative
Assistant Chief Statistician, Economic Statistics, Statistics Canada
For the wealth quintile, the top one would be the top 20% in terms of wealth.