The State of the Canadian Economy- How Will It Affect My Financial Future?
If you watch the financial news these days, you might be very confused. It might seem as if the state of Canada’s economy changes every day, and whether it is doing well or badly can vary with media news reports and people’s own opinions. The Canadian economy might improve or get worse, but whatever happens, you can always prepare yourself for the future.
Have you ever thought of how much the economy affects you? Every time that you eat food from a store or go out shopping, you are contributing to the Canadian economy- if you are a consumer, you are a big part of Canada’s Capitalist society. You might also have a part-time job or already be in a training program for a special type of career.
Almost all of the people in Canada participate in the economy in some way- some may say you start “participating” as soon as you are born. If you buy supplies from stores, use electricity from the power system, or send your children to schools, you are participating in the economy. Most people are very closely connected to the economy through their jobs, homes, and almost everything that they do.
In recent years, the economy has shown signs of trouble, especially since wages and job opportunities have not kept up with costs-especially housing. In 2008, a large number of people in the United States were unable to pay for the houses that they had bought. It is widely suggested that the crisis started “because banks were able to create too much money, too quickly, and used it to push up house prices and speculate on financial markets” (http://positivemoney.org/issues/recessions-crisis/ ). The problem started a worldwide economic crash which is still affecting people today. In 1929, also, the stock market crashed because the prices no longer reflected what people were able to buy.
Our Canadian dollar has been at an all-time low. The unemployment rate has been climbing, especially in Alberta, but also elsewhere in Canada. People in the United States are not buying much from Canada because their economy is also struggling. Meanwhile, the amount of money that people owe for their education, homes, or other purchases has grown to over 163% of their annual income. Unless they can find better jobs or reduce their spending, people could find themselves in a really bad position. Because of the oil crisis happening in Alberta (and echoing across the country), it has the highest debt ratio amongst residents, more than any province in Canada.
What does all of this mean for the future, especially for young people? The economy might eventually recover enough to provide good jobs and homes to everyone, but young people should be prepared to live more frugally than their parents. They also might need to be very flexible about the kinds of work they do, although it is still useful to train for a particular job. Avoiding risky investments and learning new skills might also be good ways to prepare for the future. The most important thing for the youth of today to realize is that debt and unnecessary spending will hold you back and may put you in a really bad position, financially.
Predicting the future of the Canadian economy is very difficult, and no one really knows what will happen next. However, you can help prepare yourself by learning new skills, being flexible, and learning as much as you can. That way, you will still be able to manage and even thrive, whether the economy recovers or fails.
Conference Board of Canada. Canadian Outlook Long-Term Economic Forecast: 2016. http://www.conferenceboard.ca/e-library/abstract.aspx?did=7514.
Economy Watch. “Canada Economy.” http://www.economywatch.com/world_economy/canada/.
Freeman, Sunny. “The Biggest Risks to Canada’s Economy in 2015, And Beyond.” http://www.huffingtonpost.ca/2014/12/30/canada-economy-2015-risks_n_6392052.html.
History.com. “Stock Market Crash of 1929.” http://www.history.com/topics/1929-stock-market-crash.
Huffington Post. “OECD Slashes Canadian, Global Outlook, Calls for ‘Urgent Policy Response’.” http://www.huffingtonpost.ca/2016/02/18/canada-u-s-other-g7-countries-drag-down-oecd-s-forecast-for-economic-growth_n_9261762.html.
Isfeld, Gordon. “Canada’s economy grows more than expected, lifting loonie higher.” http://business.financialpost.com/news/economy/canadas-economy-grows-more-than-expected-3.
Marr, Garry. “Canada household debt ratio hits new record of 163.3%.” http://business.financialpost.com/personal-finance/debt/canada-household-debt-ratio-hits-new-record-of-163-3.
Sorensen, Chris. “Assume the crash position: How far will the stock market fall?” http://www.macleans.ca/economy/economicanalysis/assume-the-crash-position-how-much-worse-will-the-stock-market-get/
Tencer, Daniel. “Canada’s Unemployment Rate Rises to 7.2% — Largest Gap with U.S. Rate in 14 Years.” http://www.huffingtonpost.ca/2016/02/05/unemployment-canada-january-2016_n_9166884.html.
Leave a comment!