Average Canadian household’s finances doing better than expected: report

 

Despite the fact many have been out of work for at least some part of 2020, the average Canadian household's finances are holding up well compared to previous economic downturns, according to a recent report from BMO Economics.

“Canadians’ financial health is highlighted by a mountain of $150 billion in excess savings,” Doug Porter, chief economist for the BMO Financial Group, said in a news release.

“We believe households will need little policy prodding to ramp up spending on services, when health circumstances allow; witness the speed and vigour with which consumers returned to stores and malls during partial re-openings this summer. We look for spending to rebound almost 6 per cent in 2021, and by more than 7 per cent when inflation is factored in," he continued.

According to the findings, the biggest winners of the pandemic have been online retailers--ecommerce sales more than doubled during the height of the lockdown.

Further, with more Canadians working from home, spending on furniture and household equipment saw a 10-per-cent increase compared to last year.

Moreover, with additional restrictions in place for many regions, Canadians spent 54 per cent less on hotels and 22 per cent less on restaurants in 2020 compared to 2019.

“While the pandemic continues to pose significant challenges, Canadians have demonstrated financial resiliency while achieving an unprecedented level of savings,” John McNain, head of Personal Banking Products and Experience for BMO Bank of Montreal, said in the same release.

“As we look ahead to brighter days, we encourage Canadians to continue their support for local small businesses in their communities. Continuing to prioritize support for local communities will go a long way to supporting Canada’s recovery and continued resiliency once the economy re-opens," he continued.