Outlook 2013: The cost of a merry Christmas could weigh down a happy new year

For some Canadians, the new year is a time of renewal and new beginnings. For others, it will bring a nasty holiday spending hangover.

For some Canadians, the new year is a time of renewal and new beginnings. For others, it will bring a nasty holiday spending hangover.

According to a Harris/Decima survey for CIBC, nearly half of Canadians splurged on themselves by spending about $134 on average in unplanned purchases over the holidays. That was over and above the nearly $400 they planned to spend on gifts and other holiday expenses.

Canadians probably indulged even further, according to a number of BMO surveys and reports. Canadians likely spent a record amount in alcohol this holiday season, contributing to an estimated $19 billion in sales of wine, beer and spirits in 2012, according to BMO Capital Markets.

A Pollara survey conducted for BMO just before Christmas also found that 60% expected to spend time and money to travel over the holidays. And nearly two-thirds of Canadians planned to be out looking for deals on Boxing Day.

All told, BMO suggested Canadians spent more than $1,600 on average during the Christmas season this year.

All that spending, while a jolt of good news for retailers, might be a drag on the economy in the longer term. A Consumer Protection BC survey suggested that while 95% of consumers in the province planned to buy gifts this holiday season, 24% didn't have the money available to pay for them. About 16% planned to use their credit cards to make purchases and pay the total amount off over time. Five per cent said they planned on using a bank overdraft, 2% would take out a payday loan and 1% said they planned on taking out a bank loan to buy gifts.

British Columbians appear to embody a noble level of generosity given that nearly a quarter of B.C. residents are willing to go to such financial extents to spread holiday cheer. After all, nearly 80% donate to charity each year, according to Statistics Canada, and only a quarter bother to report their donations on their tax returns, according to a Fraser Institute report. But there should be no shame in living within one's financial means. The price of not doing so is too high for both giver and receiver. •

comments powered by Disqus

More from Economy

NAFTA uncertainty spurs Canadian businesses to consider moving south: survey

26% of businesses polled said they would move part of their operations to the U.S. in response to trade negotiations.

Read Article

Canadian household debt hits record high: StatsCan

Read Article

Insider trading: December 12, 2017

The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed in the week ...

Read Article

B.C.’s employment jumps in November

Read Article

Infographic: How currency impacts your investments

Currency fluctuations don't just affect foreign purchases; they can also have an impact on portfolio performance. This infographic explains why.

Read Article

Subscribe to our mailing lists

You may withdraw your consent at any time.

* indicates required

Newsletters

* You can modify your newsletter subscriptions at the bottom of any newsletter you receive.
Business in Vancouver Media Group
303 West 5th Avenue, Vancouver, British Columbia
V5Y 1J6 · Canada
604-688-2398
×