Personal debt
Although the U.S. economy and population are almost
10 times the size of Canada’s, the two countries show
several similarities. Both have relatively high per-capita
income and living standards. Given geographic prox-
imity to the U.S. and a smaller economy, Canada is
affected more than other countries by changes in the
U.S. economy and in its commercial and financial
institutions—especially when such institutions have
branches in Canada. Since the U.S. is Canada’s major
trading partner (taking 81% of total exports in 2005
compared with 64% in 1980, and accounting for 67%
and 64% of imports), the U.S. recessions of the early
1980s and 1990s, as well as the boom beginning in the
late 1990s, spread to Canada within short order. Both
countries have also experienced almost the same rate
of inflation—goods and services worth $1.00 in the
respective currencies in 1980 cost $2.43 in Canada and
$2.37 in the U.S. in 2005.
Population characteristics are also similar. Two-thirds
of persons 16 years old and over in each country par-
ticipate in the labour force. A greater proportion of
women were working in 2005 than in 1980. Both
populations are aging, the median age increasing
between 1980 and 2005 from 28.9 to 38.0 in Canada
and from 29.8 to 35.9 in the U.S. Since both countries
have large immigrant populations, the median age is
affected by the mix of native-born persons, the age of
immigrants and emigrants, and fertility and mortality
rates by age. Over the last 25 years, the proportion of
persons 65 and over has risen from 9.4% to 13.1% in
Canada and from 11.2% to 12.3% in the U.S. In both
countries, the proportions of persons living alone and
female lone-parent families have risen.
Age is a key determinant of personal consumption
expenditure, income and saving, but spending is also
much affected by key monetary variables such as dis-
posable income and access to credit. The following
charts highlight various aspects of Canadian and
American income, spending, saving and debt over the
last 25 years.
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