The Bank of Canada said this week it is growing more concerned about the ability of households across the country to manage their debt.
"Nobody should expect that interest rates are going to go back down to the very low levels that we've seen over the last decade or so," said Tiff Macklem, the Bank of Canada's governor, during a news conference outlining the central bank's latest annual financial review.
"We're in a transition period to a world where interest rates are going to be higher than what many people have gotten used to and that transition is going to take a while. And through that transition that creates some risks."
Ted Michalos sees those risks up close everyday. A licensed insolvency trustee at Hoyes, Michalos & Associates, his firm recently reported that close to 100,000 Canadians, including nearly 35,000 Ontarians, filed a bankruptcy or consumer proposal in 2022.
"I am quite confident we are going to see an increase of 25 per cent this year over last year, and next year we'll see another 25 per cent increase over this year," said Michalos, during a recent appearance on Village Media's Inside the Village podcast.
During the interview, Michalos shared an alarming story about a client who came into his office with 29 credit cards and a combined debt of $244,000. "That was a freight train heading straight towards a cliff," he said.
You can watch the full episode HERE.
Hosted by Scott Sexsmith and Michael Friscolanti, the Editor-in-Chief of Village Media, Inside the Village is a news and current affairs podcast that provides a weekly window into some of the best local journalism from across our chain of Ontario newsrooms. Produced by Derek Turner, the program also explores bigger-picture issues that impact people across the province.
Every episode is available on this news site /insidethevillage. If you prefer the audio version, it is available wherever you find your favourite podcasts.
You can reach us at [email protected].
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