Bank of Canada has released its quarterly Monetary Policy report.  It is useful here in the context of Canada and the impact on consumers, particularly as Canada has been painted as being in better shape than other countries.  Consumer confidence represented by purchasing is down, but consumer credit is still growing at a slower pace.  They question will be to what extent credit defaults arise over upcoming months.

Speech and Report:

Global industrial production has fallen sharply …

… and Canadian GDP has fallen sharply too, and worse than predicted earlier ..

… while the Canadian hit on wealth has been less than the US the impact on Canadians saving (spending less) is similar.

 

Bottom line – the impact on Canadian banks and merchants must be to expect significantly less spending though to 2011 at the earliest.

Credit growth and credit conditions in Canada remain tight according to the report, although credit is still growing, albeit at a slower pace. 

 

	Mar-09
	C$ Billions Outstanding	% Distribution	12-month  Dollar Change	12-month % Change	3-month % Change (annualized)	1-month % Change (annualized)
(C$ Billion)
Total household credit	1324	100	100.5	8.2	6.7	4
Consumer Credit (1)	416	31.5	29.3	7.6	9.4	5.8
Chartered Banks	299	22.6	36.6	13.9	13.1	6.7
Non-Banks* (2)	64	4.9	-1.4	-2.1	6.5	8.3
Loans securitized by banks and non-banks*	53	4	-5.9	-10.1	-9.9	-9.9
Residential Mortgage Credit	908	68.6	71.3	8.5	5.5	3.2
Chartered Banks*	435	32.9	-29.3	-6.3	-14.7	-26.7
Non-Banks*	187	14.1	8.5	4.8	4.1	3.4
Loans securitized by banks and non-banks:
NHA MBS program*	266	20.1	96.2	56.7	36.8	63.8
Other securitization products*	20	1.5	-4.1	-16.9	-15.3	-15.9