Private Savings In Canada

The bank rate is the interest rate at which the Bank of Canada stands ready to lend reserves to chartered banks. The banker 's deposit rate is the interest rate that the Bank of Canada pays banks on their deposits at the Bank of Canada. Changes to these rates by the Bank of Canada typically spread to other interest rates and therefore will influence the amount of lending done by the banks.

The Canada Pension Plan is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability and death.

The reason for Canada’s large gap in wealth is best explained by changes in labour markets, changes in families and changes in public policies

Inequality in Canada is not as prominent as many other places around the world, although it does remain in certain segments of Canada. There are many forms of inequality in Canada and internationally, although this papers main focus is going to be the inequality of wealth. According to Steven Kerstetter “Canadians may view their country as a land of opportunity, but it is also a land of deep and abiding inequality in the distribution of personal wealth” (Kerstetter 2002). The “gaps between the rich and poor remain evident in Canadian statistics” (Kerstetter 2002), Canadians have always kept financial security as an essential element of life and have tried to obtain and sustain it within their lives. Frank Cunningham’s article, “What’s

There is a growing discrepancy of wealth in Canada. “The gap between the wealthy and the poor continues to grow. Seventy percent of wealth in Canada belongs to the most affluent section of Canada's population (Mojtehedzadeh, 2014)”. Many believe that Canada is not going through such a dramatic disparity between rich and poor in comparison to other countries. However, the rich get richer, while the poor get poorer. The gap between the wealthy Canadians and the rest is constantly growing and the primary reasons are the rising unemployment rate in Canada, globalization, inequality in wages and salaries, and high education rates.

Trudeau representing a younger generation, with economic commitments to the middle class, and Harper representing Big business and Canadian bureaucracy. Harper to nobody’s surprise is and was a fiscal conservative, meaning that the conservative government did not want to spend much, on social welfare programs, and various other initiatives while balancing the budget. This was perhaps the election of fiscal conservatism as even left wingers such as The NDP and The Green Party, who are usually the parties who suggest an easy monetary policy. Trudeau was only person in this election who was promising an easy money policy, this idea is not a new one, and it was originally introduced by economist John Maynard Keynes in the 1930’s. The easy money policy guarantees an increase in aggregate demand in the economy as the government increases spending and runs large deficits. This is the same economic plan that would allow Justin Trudeau’s father Pierre Trudeau to prosper as Canadian Prime Minister for 15 years, and is in fact called Trudeaunomics, based on their own personal brand of financial policies.

Canada’s economy has to face many issues. One of these being the rate of exchange. The canadian dollar has been going up and down constantly throughout many years. “The first paper money issued in Canada nominated in dollars were British Army notes, issued through 1813, The Bank of Canada was created in 1934 and given responsibility, through an Act of Parliament.” Much has happened to the dollar throughout the years; the economy always varied depending on the dollar worth because it has always played a major role on the economy. Pertaining to the issues of the exchange rate, I will discuss two main ways of it and how it plays a big role on the economy in present times.

Poverty is a worldwide crisis affecting not only developing countries but, well developed countries like Canada. Although in Canada poverty is not an prevalent issue it affects families and their life style. The after tax income in 2000 was $45,800, 13 years later the after tax income has raised to $53,000 (Statistic Canada 2015). The raising income has helped diminish poverty present in Canada helping families live a healthy, happy life. With the raising income the poor are being benefited. The lowest income earned has increased by 14.6% rising from $15,100 to $17,300 (Statistic Canada 2015). The highest decile increased by 24.6% to an income of 130,600 (Statistic Canada 2015). The after tax income is rising but, the wealthy are becoming more

In his article 'Debt and family type in Canada' Matt Hurst leaves us with no room for doubt, that Canada has a major debt problem. Within a quarter of a century (between 1984 and 2009) the average household debt has gone up to 110k. To date, we've not only surpassed the G7 nations in household debt, but we've seen the sharpest rise in debt compared to any other G7 nation.

Canadian dollar is significantly dropping in price and Canadians are starting to become worried. It is down at 8.7% this year and is trading at $0.86US. It has sunk more than it has in three years and even the loonie has depreciated 1.8 percent to $1.2340 Canadian (CND) per U.S. dollar. The repercussions of this economic downfall are crucial to our economy. As a result of the Canadian dollar sinking, central banks are unexpectedly cutting interest rates, and the crude oil’s collapse will slowly inflate and permeate the economy. Canadian exporters and citizens with U.S. dollar investments gain from our collapse of the dollar. However, it will take a toll on Canadians with higher prices for a wide range of imported consumer products such

Although, Canada is a close neighbor of the US, its economy did not seem be much affected by the recent 2008 global crisis. For explanation, we need to take a look at Canada’s banking system and regulations. Bordo, Redish, and Rockoff explain that despite of the fact that both countries started out as colonies of Great Britain, their banking systems evolved differently. For example, Canada banking system was created as a system of large financial institutions that evolved into oligopoly due to the entry restrictions, whereas the US banking system was fragmented and fragile. Further, the Canadian banking system had absorbed the mortgage market, investment banking, and was tightly regulated by one overarching regulator. However, the US

A pension policy for the province of Ontario is being discussed, in an attempt to make it more effective or being readily available. The existing issue is how it functions in low interests rates and low returns in equity markets. Also, the low participation in such plans is failing the system as a whole. It is important the government to protect workers in the private sector; as it is noted one-third of the paid workforce in 2005 was in a registered pension plan. Canada lacks when it comes to voluntary employer-sponsored pension plans and tax-assisted programs, like the TFSA, who must improve their services. The current pension plan fails to accommodate for private sector workers that are provided with no other occupation-related pension program other than the CPP. Many of the solvency funding rules are still adopted from the Ontario Pension Benefits Act in 1966. The voluntary participation system has failed in Canada. The government must change into a compulsory contribution system for it to achieve the sufficient accumulation of assets. It is of concern that “nearly two thirds of private sector DB pensions plans operated either closed or frozen plans”. All pension plans should be based on individual circumstances, but currently the system lacks in regulating. The other main issue is low household saving rates that are misbalancing pension funds reserves. Many politicians are focusing on the type of pension scheme to use, instead of finding a way to increase the level

The macroeconomic methodology concerns itself with the influence of economic indicators such as GDP growth rate, rate of inflation, money supply, interest rate, etc., on the saving rate in an economy. At the micro level, individual saving and consumption attitudes, particularly households, have a particular relevance for financial stability of the economy. Poor savings attitudes induce financial disequilibrium as financial intermediation functions becomes difficult to realise (Modigliani & Brumberg, 1954; Nwachukwu & Odigie, 2011).

Money market is the short-term loan market which is less than one year maturities with relatively liquid and low-risk debt due to short duration. Governments and large corporations are usually issued the money market securities in forms of banker’s acceptance,

The Neo-classical or the Loanable Fund Theory was expounded by the famous Swedish economist Knot Wick-sell. Further, this theory was elaborated by Ohlin, Roberson, Pigou and other new-classical economists. This theory is an effort to improve upon the classical theory of Interest. According to this theory, the loanable funds theory, otherwise called the neo-classical funds theory, explains the determination of interest in terms of demand and supply of loanable