Peter Black, Local Journalism Initiative reporter

peterblack@qctonline.com

Ebenezer Scrooge gets a bum rap. What was his crime, other than practising sensible spending restraint? Sure, he could have forked over a few shillings to the charity drive gents to help “buy the poor some meat and drink and means of warmth,” but surely he deserves a little credit for sticking to his principles of fiscal prudence.

Did we just say “credit”? Let’s talk about credit, then, but the not-so-beneficial kind. These days, there may not be treadmill jails and workhouses for the poor as there were in Charles Dickens’s time, but there is arguably a prison of another kind – and definitely not just for the poor. That’s the credit and debt trap.

With Black Friday becoming Black Month, and merging with the consumer orgy of Christmas “giving,” an alarming number of Canadians are facing financial stress of unprecedented proportions. Many will be hard-pressed to provide themselves with meat, drink and warmth.

The Equifax consumer credit reporting agency put out a release in September saying Canadian consumer debt had reached $2.4 trillion dollars by the second quarter of 2023 alone. The average non-mortgage debt among credit card users was $21,131.

The company said, “Many Canadians are slowing down their credit card spending, but lower-income households are having a harder time curbing spending, and fewer consumers were able to pay their monthly credit card balance in full during the second quarter.”

Some folks may find that paying off the balance notion laughable, as making the minimum payment may be beyond the means of many credit junkies.

When you add to the credit debt what Canadians as a whole owe on their mortgages, the crunch is truly staggering. In a report earlier this year, the Canada Mortgage and Housing Corporation (CMHC) said, “Canadian households are more in debt than those in any other G7 country, and the amount they owe is now more than the value of the country’s entire economy.”

Household debt currently amounts to 107 per cent of the economy, whereas it was a mere 80 per cent in 2008, when the world economy tanked.

In her recent fall economic statement, Finance Minister Chrystia Freeland acknowledged the “squeeze” many Canadians are feeling as a result of the inflated cost of most consumer goods and the rise in interest rates. She did promise a Canada Mortgage Charter to provide some measures targeted at helping vulnerable mortgage holders.

Thanks, but Canada’s credit and debt addiction goes way beyond pretty much anything any government can do, short of erasing all indebtedness at the stroke of some magic economic wand.

Sorry, Canadians, as much as inflation (among the lowest in the G7) and interest rates (also among the lowest in the G7) are causing the current squeeze, the fact is we all spend too much, and way too much of that spending is with borrowed money.

An economist was on the radio the other day saying that the average percentage of income folks pay to put a roof over their heads has not changed dramatically in the past several decades – about 30 per cent.

What has changed is the pressure, the need, the impulse, the whim of spending on a bunch of other things people consider to be essential for modern life – things they must have now.

There’s the car (or cars), the cell phone plan, the high-speed internet (all multiplied by the number of family members) and the trip to the Dominican Republic, Cuba or Costa Rica. There’s the summer vacay and camps for the kids, sports for the kids, lift tickets, those shoes, that suit, that restaurant meal, that game, movie, play or concert. Charge, charge, charge.

Not to sound too Scrooge-like here, but it would seem the affordability crisis is not just a product of inflation, but also of a lack of individual discipline, discretion, patience and sacrifice when it comes to spending.

Humbug to credit.