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How much do we owe, and what are we doing about it?

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This story is part of a series we’re calling Debt Nation, looking at the state of consumer debt in Canada. Look for more coverage in the coming days, including on car loans, mortgages and credit card debt.


Canadians are positively swimming in debt.

More than $2 trillion, in fact, according to the latest numbers from the Bank of Canada — up by almost four per cent in the past year, despite repeated dire warnings from economists, policy-makers and central bankers.

Canadians now owe roughly $1.70 for every $1 they earn, a ratio that experts warn is among the highest in the developed world.

And Canadian families are feeling the pinch.

Civil servant Lee Hyndman lives in Vancouver with her husband, Chris, a seasonal worker, and their two kids. The family didn’t use to have to worry about keeping a roof over their heads.

But all that changed with a few unexpected calamities.

A series of unfortunate events conspired to tip Lee and Chris Hyndman into a debt hole that they only recently have begun to crawl out of. (Richard Grundy/CBC)

While Lee was on maternity leave with their second daughter, Chris’s father died. Shortly after that, Lee suffered a collapsed lung, a development that meant she wouldn’t be able to go back to work as soon as she’d planned.

That led to a lengthy dispute with her employer over pay and benefits. The fight was resolved over time, but it left the family without enough cash to pay their bills for months on end.

“At that point, my finances were in ruins,” she says.

READ MORE IN OUR DEBT NATION SERIES:

COMING UP FRIDAY:

  • Don Pittis explains why credit card debt can be a dangerous trap

In 2015, the family turned to their local church, where they connected with a community of people who were eager to help. Soon they were linked up with the Credit Counselling Society of British Columbia, who got them on the path back to financial independence.

“There were people out there willing to help us, and I think they were sent to us to show us not to give up,” she says.

Now, the Hyndmans are actually able to withstand this week’s interest rate hike more than most, since their debts have been consolidated into one fixed monthly payment.

“We are learning to restructure our finances and start saving money,” Lee said, adding she’s no longer afraid to answer the phone for fear it was another creditor.

In the case of Toronto event planner Helen van Dongen, the debt problems started in 2013, when she was restructured out of a corporate career and had to fend for herself as a freelancer.

We want to hear your debt confessions. Post a short clip, maximum 15 seconds, to your Instagram Stories and be sure to tag @CBCNews and use the hastag #DebtNation. We’re looking to feature the most compelling on CBC News Instagram and CBC News throughout the week. Learn more here.

The work soon dried up, which ate into her income, but her spending hadn’t slowed down at all.

At her lowest point, she was $140,000 in the hole, she recalls, with “two credit cards maxed right out and two lines of credit.” She guesses she came within $5,000 of going completely under.

Van Dongen looked to her sole remaining asset: her Toronto condo. She sold it, paid off her debts and was even left with a modest nest egg of $30,000. “The relief of getting rid of that $140,000 albatross around my neck was enormous.”

Helen Van Dongen’s debt problems began when she was restructured out of a corporate job, but after a trying few years she has once again landed on her feet — debt free. (CBC)

She didn’t think she’d ever be a renter again, but she’s pleased with the new path she’s on. “There were some dark moments,” she says. “But ultimately mine is a good-news story.”

The same can likely be said of Pauleanna Reid, who made a series of what she calls “bad decisions” in her youth that added up to $50,000 in consumer debt in her twenties.

She started out ahead of many in life, in a middle-class two-parent upbringing she describes as “quite comfortable.” But the 30-year-old says she developed a taste for the finer things during her high school years, while dating a man who was running a money counterfeiting ring.

“I was exposed to a lot of money very quickly,” she says. “A very fast lifestyle — and I knew it was wrong at the time, but when you’re 17, when you’re young and naive, you know it’s wrong but you kind of do it anyway as long as you can get away with it.”

That relationship ended, but it wasn’t long before she was living on borrowed money to finance the lavish lifestyle she had grown accustomed to.

“In order to keep up with everybody else, I lived off my credit card,” she says. The bills kept piling up, but they were easy to ignore, she says. Her lowest point came in the form of a phone call with one of her many creditors.

“A collections agency called me looking for their money … and he had a heart-to-heart with me for a second, [he said] all things aside … you are way too young to have this kind of debt … what are you doing with your life?” she recalls him saying.

Pauleanna Reid racked up $50,000 worth of consumer debt in her twenties, but has managed to dig herself out of most of it. (CBC)

That tearful phone call was the harsh truth she needed to hear. She started working with a financial adviser and credit counselling agencies to get back on the right path, starting with the tiny step of setting aside $50 per month toward debt repayment.

Today she’s within $7,000 of being debt-free. Better still, she supplements her $65,000 day job as an executive assistant with two side hustles that bring in extra cash. It makes for a lot of 18-hour days, but “I just made the choice and the decision to change it,” she says.

You are way too young to have this kind of debt … what are you doing with your life?– Pauleanna  Reid, recalling what a collections agency told her

Economist Frances Donald, with insurance conglomerate Manulife, has been among those banging the drum about Canadian debt loads for a while, which is why she’ll be closely watching the impact of this week’s modest rate hike from the Bank of Canada.

Donald isn’t so much concerned with the amount that Canadians owe in absolute terms — it’s what it costs to finance those debts that keeps her up at night.

Average household debt per city*

By Donald’s math, about $14 out of every $100 that Canadians take home currently goes toward paying down the principal and interest costs on their debts.

Every time the central bank raises its rate to make borrowing more expensive, that figure inches up a little.

“What we’re going to witness is that $14 starts to climb to $15 or $16 or higher,” Donald says.

“How high it goes depends on how high interest rates are raised,” she says. “So where’s that extra money going to come from?”

When faced with higher costs of financing debt, consumers will typically dip into other sources to pay it off. That means they’ll raid whatever piggy banks they have, consolidate their loans into as low a rate as they can find, and stop spending on luxuries like new cars, new clothes or a meal out at a restaurant.

While $100 reallocated away from a restaurant meal and toward debt repayment may not sound like much, it makes an impact as it filters down through the economy, Donald says.

“That restaurant makes less money and doesn’t hire that incremental person,” she says. “That incremental person doesn’t have a job and so they don’t go out and spend money.”

“The feed-through effects can actually be very pronounced,” she says, which is why it’s long past time for Canadians to start taking the warnings about debt loads seriously.

Van Dongen ignored them for years, and regrets it.

“If you mess up, fess up,” she says. “And get some help.”

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Couple from Toronto buys dream home in Mushaboom

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MUSHABOOM – A couple who lived and raised a family in downtown Toronto developed a five-year plan in 2015 to purchase their dream home.

In September they moved into the home – located on Malagash Island in Mushaboom on Nova Scotia’s stunning Eastern Shore – that met and exceeded their best dreams for their retirement.

The Camerons, Bruce and Tanya, decided in 2019 they would explore the Maritimes to see what real estate was available to become their potential retirement home. In the spring of 2020, during a global pandemic, the real estate boom hit their city, and they were hearing the same for Nova Scotia. Our province was their first-choice for attaining their desire for an entirely different lifestyle – away from the busyness of the city.

“We had $300,000 to $350,000 as a home value in mind to buy. Our semi-detached located off Danforth in Toronto was priced at $850,000. We wanted to come out ahead, so we would be secure in retirement,” Tanya said.

Their century-old home had prime location near the subway and GO Transit Line for a great 13-minute commute downtown.

“We enjoyed our community,” explains Bruce “… we had great neighbours, young children around and street parties – lots of social activity.”

Bruce says, “Our agent suggested a starting quote of $899,000. We did not do any renovations and only some staging. Fifty couples went through and we received four significant offers. Six days later we sold – with zero conditions – and a price of over a million dollars. We just requested a closing of September 2020 to get the kids off to school – which we got.”

The couple got more than they had anticipated.

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Rabobank Announces Leadership Changes in U.S., Canadian Offices

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NEW YORK, Dec. 16, 2020 /PRNewswire/ — Rabobank, the leading global food and agribusiness bank, has appointed two of its top executives, Tamira Treffers-Herrera and Robert Sinescu, to become Co-Heads of North American Client Coverage, positioning the Bank for future growth in the region.

Treffers-Herrera has also assumed the role of Vice Chairperson and Head of the Atlanta office, where she additionally oversees Rabobank Mexico, which is led by Eduardo Palacios. Sinescu is the Head of the Chicago office, and also oversees Rabobank Canada, led by Marc Drouin, who was recently appointed as Canada’s General Manager.

Treffers-Herrera and Sinescu report to David Bassett, Head of Wholesale Banking North America, the Bank’s corporate and investment banking business for the region based in New York.

“Both Tamira and Robert have a demonstrated history of strong leadership, operational excellence and passion for our clients,” Bassett said. “Their broad experience and deep sector expertise will be invaluable in delivering dynamic results for clients while accelerating our growth trajectory in North America.”

Each office will have an even greater focus on key Food & Agribusiness sectors and clients: The Chicago office will drive growth in sectors including Dairy, Farm Inputs and Grains & Oilseeds, which are also key areas of focus for the Canada office. The Atlanta office will focus heavily on sectors such as Animal Protein, Beverages, Sugar, and Supply Chains, which are important sectors in Mexico as well.

“Rabobank is fully committed to our clients throughout North America, and we believe our new sector-focused coverage will improve our ability to provide knowledge-based, value-added solutions that benefit our clients,” Bassett said.

Treffers-Herrera was most recently based in London as CEO of Rabobank’s European Region from 2016-2020, where she took the organization through Brexit. Prior to that, she worked in the Atlanta office from 2002-2016. During her tenure in Atlanta, Treffers-Herrera served as Global Sector Head – Consumer Food & Beverages, and prior to that she was a senior banker for a portfolio of large beverage and consumer foods clients. She holds a Bachelor of Arts degree from the University of Kentucky, a Master of Arts from the Patterson School of Diplomacy and International Commerce and has studied at The University of Chicago Booth School of Business and Harvard Business School.

Sinescu has been with Rabobank for over 21 years and was previously General Manager of Rabobank Canada, where he oversaw all operations, business development, commercial strategy and relationships with regulators. In addition, he continues to serve as CEO of Rabo Securities Canada Inc. Prior to Canada, he was a senior banker, Head of Corporate Banking, European Sector Head for Sugar, and a member of the Management Team for Rabobank France. He holds a Bachelor of Science in Business from the Bucharest School of Business, a Master of Business Administration & Management and a Master of Science in Banking and Corporate Finance from Sorbonne University in Paris, and has studied at Brown University.

Drouin has worked with Rabobank’s Canadian team for more than nine years and most recently served as a senior banker, Head of Rabobank Canada’s AgVendor Program and a member of Rabobank Canada’s Management Team. He brings extensive wholesale banking experience within the Dairy, G&O, CPG and Supply Chain sectors. Drouin holds a Bachelor of Arts degree from McGill University and a Master of Business Administration in International Finance, Marketing and Management from the Schulich School of Business at York University.

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Greybrook Realty Partners & Marlin Spring Brand Jointly Owned Asset Manager – Greyspring Apartments

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TORONTO, Dec. 14, 2020 (GLOBE NEWSWIRE) — Greybrook Realty Partners and Marlin Spring are pleased to announce the new branding of their jointly owned investment and asset management firm, Greyspring Apartments. With a portfolio of more than 2,000 units and CAD$375 million in assets under management, Greyspring Apartments is focused on the acquisition and repositioning of multi-family assets throughout Canada.

The new name and branding is an important step in Greyspring’s evolution as an independent operating business. Formed in 2018 by long standing-partners Marlin Spring and Greybrook Realty Partners, Greyspring Apartments was established with the goal of building a leading asset management firm with a robust portfolio of residential rental real estate assets in primary and secondary markets across Canada.

Greyspring’s talented team of real estate, asset management and finance professionals is overseen and guided by the Management Board, whose members include Benjamin Bakst, CEO, Marlin Spring; Elliot Kazarnovksy, CFO, Marlin Spring; Sasha Cucuz, CEO, Greybrook Securities Inc.; Peter Politis, CEO, Greybrook Realty Partners; Chris Salapoutis, President & COO, Greybrook Realty Partners; Ashi Mathur, President, Marlin Spring; and Karl Brady. In addition to his role on the Management Board, Karl Brady leads Greyspring Apartments as its President. 

“We are pleased to announce the official name and branding of a business we formed with our partners at Marlin Spring a few years ago,” said Peter Politis, CEO, Greybrook Realty Partners. “Greyspring has been diligently focused on the execution of strategic value-add programs across its portfolio that are improving the quality of housing for tenants and overall asset values. For Greybrook investors, expanding from our core business in real estate development to the value-add space through Greyspring, has allowed us to provide our clients with investment opportunities that diversify their real estate investment portfolios.”

“Marlin Spring and Greybrook have partnered on many residential real estate projects in recent years,” said Benjamin Bakst, CEO and Cofounder, Marlin Spring. “To a great extent, Greyspring illustrates our approach to partnerships. We believe in, and strive for, responsible growth through deepening our relationships with our trusted partners. With Greyspring, we’ve formalized our focus on providing better and more affordable living experiences for Canadians. This vision aligns with our mission to deliver exceptional real estate value to all our stakeholders with an uncompromising adherence to our core values.”

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