Description: One downside of the long period of low interest rates is that consumers have been piling on the household debt. With income growth in trouble, debt is growing faster than household income. Canadians now owe almost $1.70 per every $1 coming in. The Bank of Canada is concerned about the impact of these debt levels on the financial stability of the country.

Date: September 15, 2016

Source: theglobeandmail.com

Link: http://www.theglobeandmail.com/report-on-business/economy/household-debt-surges-to-new-record-as-borrowing-continues/article31893150/

Discussion Points:

1) Do you see the personal household debt issue as a risk to Canadians and the Canadian economy?

2) In the opening vignette for Chapter 8 of Wiley’s Financial Accounting: Tools for Business Decision-Making we read about how Canadian Tire manages its credit card receivables. If you were a financial executive at Canadian Tire reading this story, how would you react?

3) How do you think the accounting profession could educate Canadians about the impact of debt on their financial flexibility? Do you see a future career in working with consumers and their personal finances?