2. WOODGROVE
BANK
PAULYOUNG - BIO
โข CPA, CGA
โข Financial Solutions
โข SME โ Business Process Changes
โข SME โ Risk Management
โข SME โ Close, Consolidate and
Reporting
โข SME โ Public Policy
โข SME โ Financial Solutions
โข SME โ Supply Chain Management
โข Academia โ Advance Accounting,
Public Finance and Advanced
Management Systems
Contact information:
Paul_Young_CGA@Hotmail.com
3. WOODGROVE
BANK
โข This presentation is one perspective on Debt. It is not the only view. People are more than
welcome to visit other sites like BEA, Stats Canada, OECD, Banks, etc.
4. WOODGROVE
BANK
AGENDA
โข What is debt
โข Types of debt
โข Market Forecast
โข Government Debt
โข Corporate Debt
โข Bank Stress Testing
โข Safest banking systems in the world
โข Consumer Debt
โข City/Local Government
โข Global TV / Canada Debt
โข Canada bonds downgraded
โข Fintech
โข Training and Development
5. WOODGROVE
BANK
WHAT IS DEBT
โข Debt is an amount of money borrowed by one party from another. Debt is used by many
corporations and individuals as a method of making large purchases that they could not afford
under normal circumstances. A debt arrangement gives the borrowing party permission to borrow
money under the condition that it is to be paid back at a later date, usually with interest.
7. WOODGROVE
BANK
GLOBAL FORECAST
What drives an Economy?
โข Consumer Spending
โข Exports
โข Government Spending
Source - http://www.scotiabank.com/ca/en/about/global-
economics/economics-publications.html
8. WOODGROVE
BANK
DEBTAND CANADA/
COVD19
8
http://www.cbc.ca/news/politics/canada-election-2015-justin-trudeau-affordable-
housing-1.3220479
Rebuttal
1. RRSP Borrowing - http://business.financialpost.com/personal-
finance/retirement/rrsp/forget-tfsas-and-resps-debt-now-the-biggest-challenger-
to-rrsps-when-it-comes-to-where-to-stash-your-money. So, JT supports Harperโs
expanding RRSP, but yet JT has said people are not saving enough for retirement -
http://ralphgoodale.ca/blog/canadian-middle-class-disappointed-frustrated/. Does
this not contradict Goodaleโs statement?
2. Commitment for $20B over 10 years for social housing. It seems there are land
issues in cities like Toronto/Vancouver as such how will that additional money
provide more affordable housing and not drive out real estate prices more in those
cities? What about the waste? http://www.torontosun.com/2015/06/07/former-
to-social-housing-boss-lands-in-chicago
3. Justin Trudeau asked the experts? Who are these experts?
McCallum/Brison/Goodale?
https://www.central1.com/sites/default/files/uploads/files/analysis_report/report
_file/Housing%20myths.pdf
Summary:
It is funny how both the NDP and LPC throw out new policies including new moneys,
but do not deal with issues facing various policies. It seems to me that the statements
are narrow minded that do not look at all angle of policies.
Household debt was a 2015 election
9. WOODGROVE
BANK
GOVERNMENT
DEBT
โข COVID19 has led to fiscal management issues for all
levels of the government -
https://www.slideshare.net/paulyoungcga/canada-and-
provinces-fiscal-and-economic-management or
https://www.slideshare.net/paulyoungcga/canada-
municipal-and-local-government-whats-needs-to-be-
done
โข China debt with countries
โข Developing countries -
https://www.straitstimes.com/opinion/china-lent-billions-to-
poor-countries-they-cant-pay-it-back
โข Government Default
โข Record defaults / 2020 -
https://www.fitchratings.com/research/sovereigns/sovereign
-defaults-set-to-hit-record-in-2020-12-05-2020-1
โข Many government have Debt to GDP ratios 92% or
above
โข Government Debt (Bonds)
โข Yields are based on credit ratings
โข Government debt
โข Deficits
โข New debt financing (Infrastructure, operating
requirements, etc.)
10. WOODGROVE
BANK
CORPORATE
DEBT
โข The corporate debt of non-financial firms across major
emerging markets rose sharply from about $4 trillion in
2004 to well over $18 trillion in 2014 - (Source โ IMF)
โข In the past six years,โ the report stated, โthe global
economy has enjoyed a benign default environment as
accommodative monetary policies have fueled the
corporate debt market with abundant liquidity, allowing
many low-rated issuers to refinance when needed. The
party is likely coming to an end soon as the global
default rate is expected to approach the historical
average mark by the end of 2016.โ The default rate for
all corporate debt is expected to rise to 2.1%, Moodyโs
said. That is up from 0.9% in 2014 and 1.7% in 2015. It
also would be the highest default rate since the 2008-
2009 crisis. If the rate is realized, it would translate to
138 defaults this year, up from 109 in 2015 (a 30%
increase) and 55 in 2014. (Source โ Moodys)
โข New corporate debt - https://www.axios.com/corporate-
debt-issuance-1-trillion-2020-b813ca2e-2a29-459b-
afa5-41299c987d12.html
โข Cash Management - https://hbr.org/2020/01/why-are-
companies-sitting-on-so-much-cash
13. WOODGROVE
BANK
SAFEST BANKING SYSTEMS IN THE WORLD
13
Source - https://passportsymphony.com/countries-with-the-safest-banks/
1. Finland
2. Canada
3. Hong Kong
4. Norway
5. Singapore
6. Germany
7. Switzerland
8. Luxembourg
9. Sweden
10. Guatemala
11. Chile
12. Panama
13. South Africa
14. Belize
15. Vanuatu
โข Government debt issues
โข Zambia - https://www.bloombergquint.com/business/zambia-s-debt-
burden-hinders-access-to-imf-coronavirus-funds
โข Banks taken loans provisions
โข Canada write-downs - https://www.wsj.com/articles/canadas-banks-
take-earnings-hit-from-loan-loss-provisions-11590779182
โข Tax Havens
โข Luxembourg is Ranked #12
โข Source - https://www.businessinsider.com/tax-havens-for-
millionaires-around-the-world-2019-11#12-luxembourg-4
14. WOODGROVE
BANK
HOUSEHOLD DEBT
Source: OECD
Household debt has risen markedly since
the turn of the century and stands at a
historically high level in most OECD
countries.
It examines the vulnerabilities associated
with high household debt for households,
the financial system and the wider economy.
Finally, it describes the challenges faced by
policymakers at the current juncture and
outlines responses in terms of monetary,
micro and macro-prudential, and housing
policies.
15. WOODGROVE
BANK
CANADA
AND USAโ
HOUSEHOLD
DEBT
Source - https://economics.td.com/impact-pandemic-financial
โข CMHC new debt policies - https://www.ratespy.com/breaking-cmhc-
rumoured-to-tighten-its-mortgage-rules-impacting-first-time-buyers-
060414150
โข BOC warns about business and household debt -
https://nationalpost.com/pmn/news-pmn/canada-news-pmn/bank-of-
canada-warns-of-excess-business-household-debt-from-covid-19
21. WOODGROVE
BANK
EDUCATION AND PROFESSIONAL
DEVELOPMENT
โข If you like to learn more about
trade and/or other subjects as
part of your professional
learning and development then
feel free to review my material
on https://www.udemy.com/
(search Paul Young CPA CGA
22. WOODGROVE
BANK
RISKS โ
WHAT
NEEDS TO
HAPPEN
โข Systemic issues with housing -
https://www.slideshare.net/paulyoungcga/latest-new-housing-market-canada-
april-2020 or https://www.slideshare.net/paulyoungcga/urban-and-rural-
planning-whats-next-236315321
โข Restructuring of government -
https://www.slideshare.net/paulyoungcga/canada-and-provinces-fiscal-and-
economic-management or https://www.slideshare.net/paulyoungcga/canada-
municipal-and-local-government-whats-needs-to-be-done or
https://www.slideshare.net/paulyoungcga/how-to-reform-local-and-municipal-
government
โข The new reality of economy post-covid will see many issues facing businesses
- https://www.slideshare.net/paulyoungcga/state-of-the-world-economy-june-
2020 or https://www.slideshare.net/paulyoungcga/key-macro-and-micro-
indicators-canada-april-2020-and-may-2020
โข Cheap Debt cannot last forever
โข Corporate debt
https://www.forbes.com/sites/ezequielminaya/2020/06/16/indicator-points-
toward-slowdown-in-us-corporate-debt/#150a98cf43a5
โข Restructuring of many businesses -
https://www.slideshare.net/paulyoungcga/canada-hospitality-sector-whats-
next-236439916 or https://www.slideshare.net/paulyoungcga/retail-sales-
united-states-may-2020
โข Hike in mortgage or personal credit rates
โข More consumer default
โข Lower Credit rating for government
โข Higher bond yields means higher interest rates and higher debt coverage