Archive | Finance

Trade woes, interest rates to significantly slow Canada’s economic growth

Posted on 28 March 2018 by admin

Rising interest rates, moderating employment expected to curb household spending in 2018.

Uncertainty around NAFTA talks and the possibility of increased U.S. duties will contribute to a significant slowdown in the Canadian economy this year after a stellar 2017, the Conference Board of Canada says in its latest forecast.

While household spending will remain the main economic driver, the pace of spending will ease amid rising interest rates, high household debt and moderating employment growth, the board’s 2018 economic outlook for Canada says. It adds that exports and business investment are unlikely to pick up the slack.

The forecast notes that GDP growth began to taper off late last year, and the trend is expected to continue, with 2018 growth pegged at 1.9 per cent, down from 3 per cent in 2017.

Fears that North American Free Trade Agreement negotiations will fail to produce an agreement and that the Trump administration will impose tariffs on Canadian steel and aluminum “are challenging businesses and exporters alike,” said Matthew Stewart, the economic research and analysis group’s director of national forecasting.

On March 8, the U.S. president imposed a 25 per cent tariff on imported steel and a 10 per cent duty on U.S. aluminum imports, but included exemptions for Canada and Mexico that could be rescinded if the free trade talks fail.

Recent Conference Board research found that real GDP would lose half a percentage point of growth in the year following the termination of NAFTA, but the impact could be larger if business confidence or foreign investment to Canada is undermined by the loss of free trade.

The trade uncertainty has helped keep a lid on investment plans, with business investment spending forecast to expand by just 1 per cent in 2018, down from growth of 2.3 per cent in 2017, despite a more positive outlook for profits and sales.

Stewart said some may also find Canada to be a less competitive destination for investment considering the large American tax cuts passed at the end of last year.

And even with strong demand in the U.S. and a competitively low Canadian dollar, the forecast says Canadian exports will continue to underperform in 2018. For the third year in a row, non-energy merchandise exports are on track to record almost no growth, while exports in the wood products, aerospace and automotive sectors are all forecast to decline for the second year in a row, the outlook says.

It adds that tight labour markets and increased retirements from baby boomers will lead to much slower employment growth in 2018, with job gains to fall to 232,000 positions in 2018, down from 336,900 in 2017. Low unemployment, however, will help support wage growth, which the outlook says could help cushion the impact of rising interest rates.

And as consumers dial back spending, purchases of durable goods are expected to bear the brunt of the slowdown. Overall, real personal consumption is expected to increase by 2.4 per cent, down from 3.5 per cent last year.

The outlook also sees further housing market cooling on factors including a “stress test” imposed on mortgage borrowers by federal regulators that reduces the maximum mortgage borrowers can qualify for and which will reduce housing demand, particularly for higher-priced units.

This will be partly offset by stronger population gains from higher immigration targets.

Housing starts will ease to roughly 213,200 units this year from 219,700 units in 2017, the outlook says.

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Federal government spending has lifted economy, helped slow household debt, Bank of Canada head says

Posted on 21 March 2018 by admin

Stephen Poloz says Ottawa’s recent spending on programs, such as enhanced child benefits and infrastructure, have lifted the economy and pushed interest rates to a level higher than they would have been without government stimulus.OTTAWA—The governor of the Bank of Canada says the federal government’s steps in the last couple of years to take on more public debt has helped prevent an even faster buildup of household debt that has still managed to climb to historic highs.

Stephen Poloz says Ottawa’s recent spending on programs, such as enhanced child benefits and infrastructure, have lifted the economy and pushed interest rates to a level higher than they would have been without government stimulus.

He says the higher rates have helped keep the accumulation of household debt lower than it otherwise would have been had Canada continued with government belt-tightening approaches of the past.

Poloz made the comments Tuesday as he responded to questions following a speech at Queen’s University in Kingston, Ont.

His remarks come a couple of weeks after the Trudeau government tabled a federal budget that has faced criticism for its plan to continue running annual multibillion-dollar deficits across the five-year projection horizon — despite the country’s surprisingly strong economic performance.

In response to a journalist’s question, the governor says he agrees with the view consumers are facing high debt loads today because they filled in the debt-accumulation void left when governments turned to austerity by shutting down stimulus measures to address fallout from the 2008 financial crisis.

 

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ICAP organized Session of Canadian Income Tax System for its members

Posted on 01 March 2018 by admin

Canadian Chapter of Institute of Chartered Accountants of Pakistan (ICAP) had organized a Session for its members on Canadian Income Tax System on Saturday 24 February 2018 at Mississauga’s Eat More Restaurant & Café.  A large number of Chartered Accountants members had attended the session. The presentation on Canadian Income Tax System was made by two Chartered Accountant members Mr. Mohammad Nadeem, Vice Chairman of Canadian Chapter, who works with a local public accounting firm KPMG in its corporate tax group, and Mr. Mohammad Sharif Awan, who runs his own public accounting practice.

Both the members had presented with charts, all aspects of Canadian Income Tax System and its components.  After the presentation, there was question and answer session, where members’ questions were answered. The members present were benefited with the presentation and they praised the Canadian Chapter for this important and informative session, particularly at this time, when every Canadian has to file his tax return for the last year.

At the end of the session Chairman of Canadian Chapter, Mr. Rauf Ali Jan expressed thanks to the members for joining this session.

The election of Canadian Chapter Management Committee was held in December 2017 and 5 members Management Committee was elected. The Management Committee is comprised of Mr. Rauf Ali Jan Chairman, Mr. Mohammed Nadeem Vice Chairman, Miss Urooj Fatima Vohra Secretary, Mr. Farrukh Anwar Head of Financial Affairs and Mr. S. Shamshad Husain Joint Secretary.

 

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What to do about your debt and mortgages after the interest rate hike

Posted on 07 February 2018 by admin

Personal finance expert Laleh Samarbakhsh shares her advice on the best ways to take advantage of the increased rates.

Many consumers will soon find their debt loads heavier now that Canada’s central bank and the country’s biggest commercial lenders have raised their benchmark rates by one-quarter percentage point.

The country’s biggest banks raised their prime rates after the Bank of Canada hiked its overnight lending rate earlier this month by a quarter of a percentage point to 1.25 per cent.

It’s a challenge for Canadians still struggling to cope with the record amounts of consumer debt they amassed after the 2008 financial crisis because lenders use their prime rate as a benchmark for setting some other short-term rates including variable-rate mortgages and lines of credit. A hike is good news for savers as the prime rate also affects interest rates for savings accounts.

If you’re contemplating how to best take advantage of the increased rates or avoid falling into further debt, personal finance expert and Ryerson University business professor Laleh Samarbakhsh shared her advice.

Now that the rate has gone up, what financial choices should I be making?

With the interest rate increase, debt becomes more and more expensive. Before you do anything, you have to understand what kind of debt you have to start with.

We have good types of debt and bad types. Good types can include any investment that is made to contribute to progressing your future. For example, a student loan is a good type of loan because you are investing in your ability to make more money. At the same time, debt you have from real estate or your primary residence is considered a good type of debt because you’re accumulating equity.

Focus first on what is considered bad debt like credit card debt, lines of credit or any kind of debt with higher interest rates and no future investment. Pay off the debt with the higher interest rate first, but also consider what debt you have that is tax deductible.

If I have some money in a Tax-Free Savings Account, but also some debt, should I pull out that money in the account and pay off the debt?

A lot of times people might consider borrowing from a lower debt to cover a higher debt or borrowing from a TFSA to make a payment. My recommendation is if you have some tax deductibility because of debt you have, keep it. As much as paying off debt is important, if you won’t be able to pay off all your debt, you can use the deductibility you have from some to save on taxes and create an income to pay off the high-interest or bad debt.

We have had a successful year on the investing market, so if an individual makes contributions to their TFSA and has a portfolio with a higher return of 20 per cent or 25 per cent, it makes sense to keep that because the advantage is no tax being paid in the TFSA.

What should I do if I have been looking at buying a home or if I just bought a home and am dealing with a mortgage?

For individuals who care about their credit score and are applying for a mortgage shortly, consider your credit limit. The types of debt that have a credit limit should be paid off first to release your capacity.

The typical concerns after a hike are usually individuals with mortgages because those are the biggest debts people carry. My advice would be for individuals with variable mortgage rates to consider locking down a fixed mortgage rate.

What should I do if I have no debt, but want to take advantage of the hike?

Saving is making even more sense now because savings accounts will have fairly higher interest rates, so if you have no debt, my recommendation is to start with capping your Registered Education Savings Plan contributions first because that brings you tax savings.

Once the RESPs are capped, I would also invest in a Tax-Free Savings Account. The interest you make is tax-free, so I recommend maximizing your TFSA contribution.

After that, there are lots of forums and markets for investment and you can consult with your financial adviser about what is best to invest in at the time.

Some economists think we might see further interest rate hikes later this year. Should I act on those rumours now?

It’s hard to predict what is going to happen, but we know the decade of low interest rates are over. It’s important to be more careful with spending and what kind of debt we are taking on and how and what the plan for repaying it is.

If you’re concerned, take action sooner rather than later and don’t let it bring mental pressure to your daily life.

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Government of Canada Launches Pre-Budget Consultations

Posted on 14 December 2017 by admin

Canadians Invited to Offer Their Ideas on How to Grow and Strengthen the Middle Class

Department of Finance Canada Our government is working hard to grow the economy and provide more support for the middle class. Over 500,000 new jobs have been created since 2015 and the unemployment rate is nearly the lowest it has been in a decade. Canada now has the fastest-growing economy in the G7, giving the Government the ability to reinvest the benefits of that growth back into the people who contributed most to that success. As Canada’s economy continues to grow, it is important to ensure that the benefits of that growth are shared by the middle class and those working hard to join it. That means continuing to make smart investments in people and communities to ensure continued progress for the middle class, and investing in lifelong learning to give Canadians the tools they need to find good, well-paying jobs in the economy of tomorrow. It also means ensuring that government policy and budget decisions consider impacts on all genders and advance gender equality. Leona Alleslev, Member of Parliament for Aurora—Oak Ridges—Richmond Hill is inviting residents, businesses and non-profit organizations to provide their input for Budget 2018. Let the government know what your family, community, and country need in order to position for the future with confidence. Canadians can submit their ideas and suggestions online through the website launched today, www.budget.gc.ca/pbc18 and to MP Alleslev by email at Leona.Alleslev@parl.gc.ca. Quote “Our Government’s plan to strengthen and grow the middle class is working. It is creating jobs, improving lives, strengthening communities and growing the economy. But we still have work to do. This is why we are continuing with our plan to invest in the middle class and those working hard to join it. Our government needs the ideas and suggestions of all Canadians on how we can strengthen our country together. I look forward to hearing from residents of Aurora—Oak Ridges—Richmond Hill to ensure we work together on Budget 2018 to build a strong foundation in order to position our nation for the next 150 years. – Leona Alleslev, Member of Parliament for Aurora—Oak Ridges—Richmond Hilll

 

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Ontario households squeezed by worst income growth in Canada

Posted on 22 September 2017 by admin

QUEEN’S PARK – Despite paying high prices for everything from hydro to housing, Ontario households faced the slowest median income growth in the nation according to 2016 Census data from Statistics Canada.

“This report shows what families already know – they’re being squeezed,” said NDP Economic Development critic Catherine Fife. “Household costs have gone up under Kathleen Wynne, but wages are being held back.

“It’s clear that Wynne doesn’t get what families are dealing with today. It seems like she doesn’t remember what it feels like to open her own hydro bill or worry about whether your kids will ever be able to afford to move out.”

Of the 152 Canadian cities included in the report, nine saw median incomes fall. Eight of those nine are Ontario cities. Windsor topped that list, with household incomes dropping 6.4 per cent between 2005 and 2015, and London was not far behind – with a 2.1% decline in median income during that same time period.

Fife said that not only have families been let down by Wynne, but that the continuation of cuts and underfunding in services people count on threaten to squeeze families even further, like paying more out-of-pocket for public transit or home nursing care.

“Ontario families need a government that thinks less about itself and its party and more about how everyday families are doing,” said Fife.

“It’s troubling that Conservative Patrick Brown opposes raising the minimum wage, choosing to stand with big corporations instead of regular Ontario families. He also stood with Mike Harris as he cut 6,000 nurses and closed 28 hospitals. He stood with Tim Hudak as he announced a plan to lay off 100,000 workers. And he stood with the Conservatives when they pitched the privatization of both Hydro One and Ontario Power Generation. He needs to come clean on what he’d cut – because families have an important choice to make about which leader will come after Kathleen Wynne: Andrea Horwath or Patrick Brown.”

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How Will the Auto Industry Fare After Central Bank Interest Rate Rise?

Posted on 26 July 2017 by admin

Perspective from Canadian Black Book on the July 12 Rate Hike and our Auto Industry’s Record Growth

Markham, Ontario, July 14, 2017 – On Wednesday July 12, Bank of Canada Governor Stephen Poloz announced a 0.25 per cent key interest rate increase, the first rise in rates in seven years.

How will this news affect the Canada’s auto business?

What most new vehicle buyers may assume, is that the cost of higher interest rates will get passed onto them today. It is actually unlikely in the short term, that that would be the case.

For the most part, manufacturer new vehicle incentive budgets will likely absorb the rate hike for consumers so that they can continue to advertise 0% or 0.9% or 1.9% for new cars. To keep things in perspective, on a $40,000 car loan a hike of 0.25% is only an extra $100 per year of interest.

All that said, if rates continue to climb, at some point the OEMs will have to pass along those costs to vehicle buyers, initially resulting in less cash incentives. This will then eventually raise monthly payment, all else being equal.

The bigger impact of a rate increase is its immediate effect on the strength of the Canadian dollar and what that will mean to the Canadian auto industry. Our more valuable dollar is of greater concern, for both the new and used vehicle market in Canada. The dollar has increased $0.06 since May, which is a significant climb. This could lead to a cooling of new vehicle sales and is expected to cause Canadian used vehicle prices to fall over time.

As the strength of our dollar had been declining since 2013, U.S. interest in Canadian used vehicles increased. Depending on who you ask, upwards of 200,000 vehicles have been being exported to the U.S. annually. U.S. buyers and/or Canadian exporters have been taking full advantage of a lower Canadian dollar and been moving vehicles across the border to sell at a higher price in the States versus here at home. This export demand has inflated our used car prices domestically.

As a result, Canadian consumers are being pulled out of their vehicle loans/leases early by dealers who are eager to sell the consumer’s current vehicle on the used market and put the consumer into a brand new one, often for the same or lower monthly payment. This “pull forward” activity is helping to drive record levels of new vehicle sales. This activity is also possibly due to higher used vehicle prices putting consumers into a positive equity position (owe less than the vehicle is worth) much sooner.

Given that the domestic supply of U.S. used vehicles is up by about 500,000 more off lease units versus past years, U.S. used prices are falling. The Black Book (USA) Price Index is showing a ten per cent decline since last year, which is significant. The U.S. vehicle market is bracing for a large downward adjustment in used prices. Add in a stronger Canadian dollar, driving up acquisition costs and there will be less demand in the U.S. for Canadian used vehicles

At some point soon, the rising Canadian dollar and falling U.S. used vehicle prices will make it unattractive for U.S. buyers to purchase Canadian inventory in such large volumes. The impact to the Canadian auto industry will be a slowdown of “pull forward” activity, as it won’t make economic sense to pull as many consumers out of their vehicles early because they won’t command such high prices on the used market. Canadian Black Book expects that a $0.85 dollar is around the tipping point for U.S. exports to significantly slow.

On the positive side, Canadian used vehicle shoppers and used vehicle dealers will be rewarded with better deals in the market compared to what they have seen over the last few years.

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Canada ‘very prepared’ for NAFTA renegotiation talks with U.S., trade minister says

Posted on 28 May 2017 by admin

Francois-Philippe Champagne said he had a “good first meeting,” with U.S. trade representative Robert Lighthizer in Vietnam during the Asia-Pacific Economic Cooperation forum gathering.

HANOI, VIETNAM—Canada is prepared to start talks to renegotiate the North American Free Trade Agreement and is confident it will get a successful outcome, Trade Minister Francois-Philippe Champagne said Sunday.

“When you start a discussion you start with saying, ‘Well, we’re the first client’,” Champagne said on the sidelines of a meeting of Asia-Pacific trade ministers in Hanoi. NAFTA, negotiated more than two decades ago, “has been amended about 11 times so we said we’re happy to sit at the table,” he said.

Robert Lighthizer, the new U.S. trade representative, has begun the process for renegotiating the three-way agreement with Canada and Mexico, issuing a 90-day notice to Congress.

During his election campaign, President Donald Trump called NAFTA a “disaster” that cost millions of U.S. jobs and crippled the U.S. manufacturing sector. A few weeks ago, he was considering whether to pull out of the agreement entirely.

Champagne said some parts of the deal could be modernized, citing e-commerce, but he wouldn’t say whether Canada had any limitations for the discussions.

“We are very prepared and we are taking that very seriously, but we’ll put things on the table when it comes to the time to negotiate,” he said. “I am confident, if history has been guiding us, that if we succeeded 11 times that we are likely to succeed again.”

Champagne said he had a “good first meeting,” with Lighthizer in Vietnam during the Asia-Pacific Economic Cooperation forum gathering. “Whatever discussions you have start from the premise of a very fruitful relationship,” he said.

Champagne also met Sunday with the 11 remaining members of the trans-Pacific Partnership, a trade deal from which Trump the U.S. in one of his first acts as president. The TPP would have included 40 per cent of the global economy.

Some nations are pushing to continue with the TPP despite the loss of the U.S., arguing that too much effort went into negotiating it and that there are benefits for remaining countries, though some have been less committed.

In Hanoi, there was a sideline meeting on Sunday of TPP-member nations and ministers agreed to start a process to put it into force, according to a joint statement. They will ask senior trade officials to arrange how to take the continue the partnership and report back by the APEC leaders’ summit in November.

“Canada’s always been clear: we will look at whatever options would be to the net benefit of Canadians and Canadian workers,” Champagne said. “This is very much now at the stage of looking at options.”

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Panama Papers have helped fuel ‘a more aggressive CRA’

Posted on 23 March 2017 by admin

For the Canada Revenue Agency, the Panama Papers was a line in the sand.

Unlike those exposed by previous leaks, tax cheats named in the massive database won’t be offered amnesty; instead, they’re more likely to end up doing hard time.

“This is a more aggressive CRA,” said assistant commissioner Ted Gallivan in an interview with the Star. “There are some actors who need that threat of a jail term to stop, or they actually physically have to be locked up in jail to get them to discontinue their activities.”

Tax fraudsters identified in the Panama Papers will not be allowed to clear their name by declaring their hidden assets and paying back taxes and interest, a process called voluntary disclosure.

“(The Panama Papers) allows us to showcase how the CRA has changed,” Gallivan said. “There’s a bit of a paradigm shift for us: no voluntary disclosures and a lot more criminal investigations. That reflects a shift to more severe consequences for people who are participating in aggressive tax avoidance or tax evasion.”

From now on, the CRA will also fingerprint anyone charged with tax evasion, which could affect their ability to travel abroad.

“It’s about more than revenue,” said Gallivan. “It sends the message that it’s not just tax evasion, it’s not just white collar crime, it’s a serious criminal offence and it comes with serious criminal consequences.”

Internationally, Canada has long been considered lax on white collar crime, with few prosecutions and prison sentences measured in months, not years. But after the Panama Papers were made public last April, the new Liberal government quickly announced a nearly $500-million investment in the CRA to bolster tax enforcement.

Early results reflect an ongoing reorientation toward fewer, high-value tax cheats and a focus on multinational corporations.

The number of criminal convictions for tax evasion has dropped dramatically from 137 in 2011-12 to only 17 so far in 2016-17, yet the criminal fines imposed have almost tripled from an average of about $46,000 to over $123,000 for each offender.

Sentences are up, too, from an average of 18 months in 2011-12 to 26.5 months this year, according to numbers provided by the CRA.

Additional tax collected by CRA audits has increased almost 45 per cent over the last six years from $8.7 billion in 2011-12 to $12.6 billion in 2015-16. More and more of these audits target large and multinational corporations, producing tax assessments that have more than doubled in the last three years from $6.1 billion in 2013-14 to a projected $13 billion this year.

In order to move more quickly from investigation to prosecution, in the last year 230 people have been added to the compliance department and lawyers are now being embedded in investigating teams.

The Panama Papers even spawned a new branch of the CRA, known as International, Large Business and Criminal Investigations, which operates under Gallivan’s personal watch. This branch, which has 100 specialized auditors, will be taking on the most complex, big-ticket cases that often have an offshore component and involve sophisticated tax professionals, the enablers of tax evasion.

“The new thinking of the new branch is in addition to finding the taxpayers, we need to find the promoter, the head, and go after the head that’s driving this behaviour and put them out of business,” Gallivan said.

In the 2016-17 fiscal year so far, tax professionals have been fined $44.3 million for their role in facilitating tax evasion — a huge increase over the $200,000 handed down last year — and the information gleaned from the Panama Papers promises an uptick in years to come.

It helps that the CRA obtained parts of the leak before it was made public and got the ball rolling early.

“It gave us the advantage of timing. By the time the public took interest in this, we were already fairly well advanced in our work,” said Gallivan.

But the gears of justice move slowly. Almost a year later, there are 75 audits and several criminal investigations underway, but no charges have been laid.

Investigators, Gallivan acknowledged, have had difficulty finding the individuals behind shell companies used to defraud the tax collector, a phenomenon highlighted by the Star’s Canada Papers investigation.

“Some actual people have multiple corporations with millions of dollars and millions of dollars of non-compliance,” he said. “Taxpayers who are conducting these things certainly go to great lengths to obscure them.”

Last year, an international evaluation of Canada’s financial system flagged lack of transparency in corporate ownership as an impediment to law enforcement.

But Canadian enforcement efforts are only a small part of the solution. The post-Panama Papers world is about to get much more complicated for wealthy individuals who hide their money offshore and multinationals that shelter their profits in tax havens.

The EU and G20 are set to publish a new black list of unco-operative tax havens this summer, shortly after the first global system of tax information sharing becomes operational. The OECD’s “automatic exchange” system will allow tax auditors in one country to see what their citizens are declaring in another. There are 54 participating countries in 2017 and next year Canada will start sharing its tax information, along with 46 more countries.

For the 2016 tax year, Canadian multinational corporations with more than $1 billion in annual revenue will have to report to the CRA their profits, sales, employees, assets and taxes paid on a country-by-country basis. This information will then be fed into the international sharing system, creating a web of tax oversight that will be much more difficult to escape.

To prepare for this new “big data” era in tax collection, the CRA is ramping up its use of computer analysis to troll the information looking for red flags suggesting suspicious activity.

Instead of just checking the math on people’s tax returns, the CRA is developing algorithms to cross reference outside data — including real estate transactions and luxury purchases — with what people claim to be making.

“The agency knows that people who are trying to avoid paying taxes often manipulate their tax return so they look like they’re low income,” said Gallivan. “The system will flag that despite somebody’s low income on their tax return, they have a lot of money. When we see that flag, we dig deeper.”

The CRA recently started receiving real time data of all international electronic money transfers and is building a computer system to monitor more than 1 million transfers each month in real time.

Because it could take two or three years to get the system up and running, auditors are currently going through them manually, Gallivan said, having flagged more than 41,000 transactions worth $12 billion last year. The manual review will ramp up to looking at 100,000 transfers this year.

“The money flow is exactly where our focus is now,” he said. “We do have to be accountable for results.”

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Student Debt Is Rising, And Mental Health Problems Are Rising With It

Posted on 02 June 2016 by admin

Many of this year’s new post-secondary graduates have left the academic world carrying tens of thousands of dollars in debt. Meantime, those heading to college and university this fall will soon contend with steep tuition rates that often result in a similar burden.

While schools attempt to lessen the load by offering financial aid, average student debt appears to be climbing. So some institutions are also responding by beefing up their mental health services to help students cope with life in the red.

“We’re worried about one type of debt — student debt — and we want to know how to pay it off as quickly as possible,” said Dillon Collet, who is about to enter his final year at the University of Toronto’s faculty of law and sat on the dean’s advisory committee on financial aid.

The committee organized a financial aid workshop that discussed the psychology of debt. It was well-attended, Collet said, with about 60 students in the room and a lineup outside.

The committee’s student representatives also pushed to have tuition fees — and their connection to student stress — to be discussed at the faculty council’s meeting each year, Collet said.

“A lot of students suffer silently.”

Estimates suggest average student debt in Canada is past the $25,000 mark.

In 2013-14, graduates finished school with an average of $12,480 in federal loan debt, according to numbers from the Canada Student Loans Program.

However, that figure doesn’t include provincial or private loans. An Ontario student graduating from a four-year university program, for example, shouldered an average of $22,207 in provincial debt in 2012-2013. That makes for a total debtload of more than $34,000 if they also borrowed the average sum from the federal government.

The Canadian University Survey Consortium surveyed more than 18,000 graduating university students from 36 Canadian universities for its 2015 annual report. The average debt-ridden student owed $26,819.

Such a debt load can have an impact on a student or graduate’s mental health, though only a small amount of published research exists on the apparent link.

A 2015 journal paper analyzed data from a U.S. Bureau of Labour Statistics survey of more than 8,000 youth in the United States — where tuition fees are significantly higher than in Canada — to determine if debtload and psychological well-being were connected.

“Students who took out more student loans were more likely to report poor mental health in early adulthood,” said one of the paper’s authors, Katrina M. Walsemann, an associate professor at the University of South Carolina.

Canadian experts have also noticed a link, even though Canadian students don’t generally go into as much debt as their American cohorts.

Jillian Yeung Do, York University’s director of student financial services, witnessed it while working with a student. While she couldn’t provide much detail for privacy reasons, she said she became really concerned about a student.

“After that encounter, I decided that it would be a good idea to — for myself, personally, and as well for the entire team — to be trained in having these conversations with students,” she said.

The university’s health educator taught the financial services staff how to identify students in distress, listen to them and provide proper referrals. York University also plans to launch a new financial literacy campaign soon, she said.

The University of Toronto’s faculty of law staff, including its financial aid workers, will also have training on mental health issues next month, said Alexis Archbold, the assistant dean of the JD (juris doctor) program. She’s also the chair of the dean’s advisory committee on mental health and wellness, formed this past academic year.

Archbold and the committee spent the year listening to students’ primary concerns. Unsurprisingly for a professional program, she said, high tuition and the anxiety of the corresponding debtload emerged as one of the common themes.

The school’s new academic, personal and wellness co-ordinator will work with Archbold this summer to develop a wellness strategy, she said.

The committee will continue to hear from students on how to improve the strategy, which seems to fall in line with at least some of what the students want.

“We want a platform in which we can engage with the faculty and the administration,” said Collett, “and we can really talk about the nuts and bolts.”

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