This is a once in a generation opportunity to better your future: Personal finance expert
How Canadians can invest $170 billion in excess cash
The COVID-19 pandemic has driven Canadians to hoard the largest amount of cash ever recorded, a CIBC report published Tuesday said. The report said households are estimated to hold $90 billion while businesses are hoarding $80 billion, for a grand total of $170 billion. "We're in a very weird situation in which the economy is down, but the level of cash in the economy is rising," said CIBC Deputy Chief Economist Benjamin Tal, who co-authored the report. Tal said cash redeployment isn't expected to be happening any time soon, as consumer spending growth should slow down during the winter. So what should Canadians do with all that extra cash? Personal Finance Columnist Dale Jackson offers four smart ways to invest it.
Canadians feeling the financial pinch: Poll
Not everyone is flush with extra cash, though. As the pandemic rages on, many Canadians are feeling the impact on their finances. Thirty-nine per cent of respondents surveyed in a recent FP Canada poll said their bank accounts could not withstand a financial emergency. Meanwhile, 40 per cent of respondents said they don’t have a financial plan. When it comes to getting through an emergency, 37 per cent said they rarely put money aside.
CFIB urges government not to raise CPP premiums
The Canadian Federation of Independent Business is calling on the federal government to abandon plans to raise Canadian Pension Plan premiums in 2021. The lobby group warns that higher payroll taxes could limit small businesses’ ability to hire and pay employees as they struggle to operate during the pandemic. The employer’s contribution rate for the CPP is set to rise to 5.45 per cent of a worker’s pensionable earnings on Jan. 1, an increase from 5.25 per cent this year.
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More than 20,000 Canadian women left workforce in pandemic: Study
The COVID-19 pandemic has led to an exodus of women from the Canadian workforce. A study from Royal Bank Canada found more than 20,000 women departed the workforce from February to October, while triple the number of men joined the labour market. The high number is largely attributed to mothers feeling pressured to leave work to take care of their children, the report said. One contributing factor is that women are more likely to work in sectors such as hospitality and retail, where the ability to work from home is lower. The report warns this pattern may hurt Canada’s economic recovery from the pandemic and the future of industries dominated by women.
COVID-19 hindering parents’ ability to save for post-secondary education
The vast majority of parents agree saving for their child’s post-secondary school is important, but 40 per cent say the COVID-19 pandemic has negatively impacted their ability do just that, according to a poll from Knowledge First Financial. Furthermore, one-quarter of respondents say they are considering a change of plans for the child’s education due to the pandemic. The majority of parents polled (75 per cent) agree the pandemic has already negatively impacted their child’s education.
Is it a good time to start a side hustle?
With the pandemic forcing layoffs across various industries, a number of Canadians are turning their hobbies into side hustles for extra income. Online marketplace Etsy Canada said new shop openings have increased by more than 250 per cent during its most recent quarter, compared to the same period last year, according to The Canadian Press. However, some critics see the rise of side hustles as a symptom of a precarious jobs market that leaves workers with little choice.
“This is a once-in-a-generation opportunity to get a better handle on your money. Some people will spend that cash when the world returns to semi-normal and other people will have made really smart choices on how to deploy that in a way that is going to alter the course of their financial future.”
-- Bruce Sellery, author of ‘Moolala,’ on what to do with excess cash