Ontario faces rising debt and falling savings as Quebec’s restraint masks uneven financial strength
Quebec households are saving nearly $15,000 more annually than the national average despite earning less—raising questions about whether the province’s high aggregate savings rate conceals deeper financial disparities.
Desjardins Economic Studies found that 49 percent of Quebec households fall within the bottom 40 percent of the national income distribution, yet the province continues to report one of the highest household savings rates in the country.
Among middle-income earners, Quebec households spent about $22,500 less than those in Ontario, despite an $11,000 gap in disposable income.
This combination of lower consumption and restrained income growth has pushed Quebec’s savings rate close to 10 percent in 2024.
According to the report, even Quebec’s highest-earning households—who have disposable incomes comparable to Ontario’s top quintile—spend less than their counterparts elsewhere.
Demographics play a central role.
Households in the 45 to 54 age group—typically peak savers—represent a significant portion of Quebec’s population. This relatively older but economically active cohort is helping drive the province’s elevated savings rate.
Even so, Desjardins stated that “other behavioural or structural factors may also be at play,” noting the province’s lower housing costs and broader spending restraint.
Housing affordability continues to distinguish Quebec and Alberta from provinces like Ontario and British Columbia.
In 2024, just over 20 percent of household consumption in Quebec was allocated to housing—the lowest nationwide.
Despite being more affordable, Alberta households spent $3,000 more on housing than those in Ontario, due to their higher overall spending.
Ontario’s position contrasts sharply.
The province now leads Canada in household debt, overtaking British Columbia in 2023, and the gap widened in 2024.
At the same time, Ontario households faced rising mortgage arrears and insolvencies. These indicators signal rising financial stress and vulnerability to economic shocks.
Desjardins forecasts Ontario’s household savings rate will decline, with earnings pressured by trade tensions with the US and growing exposure to mortgage renewals.
British Columbia may see similar constraints due to high housing costs, while Alberta and Saskatchewan are likely to maintain higher savings rates unless oil prices soften.
Nationally, household savings are projected to stay above pre-pandemic levels but below recent peaks.
Desjardins highlighted the risk of slower income growth through 2027, especially in Ontario and Quebec, which have higher job exposure to US trade and could be hit hardest by tariffs.
For Quebec, the report noted that ongoing fiscal consolidation could affect public services and income transfers, potentially requiring higher taxes.
This would weigh on household finances, even as the province remains less exposed to mortgage renewal pressures due to housing affordability.
Desjardins concluded that savings patterns reflect not only income but also behavioural, demographic, and policy dynamics.
As growth slows, the resilience of Canadian households—especially in high-debt, high-cost regions—will depend on their capacity to manage spending, absorb shocks, and maintain financial buffers.
