Tag Archive for: financial habits

Unraveling the Debt Web: How Soaring Government Deficits Could Ignite the Next Financial Crisis

How Soaring Government Debt Could Play a Starring Role in the Next Great Financial Crisis

By Barbara Shecter | Published October 27, 2025

Governments now face huge debts. They see deficits that risk global economic calm. Experts now warn that the U.S.—the world’s main engine—could spark or worsen the next major crisis because of its growing red ink.

The Growing Wall of Debt

Since the COVID-19 crisis, U.S. debt has shot up. It now reaches about US$37 trillion. Each year, a deficit of nearly US$1.8 trillion adds up. This figure is about 6% of GDP. Spending cuts have not slowed this rise. Deep political divides and a missing fiscal plan make debt cuts hard.

In April 2025, debt caught public attention. President Donald Trump put double-digit tariffs on over 80 countries on “Liberation Day.” At first, investors ran from stocks. They chose safe assets like U.S. Treasury bonds. Soon, however, this flight ended.

Rising Yields and Investor Anxiety

Bond prices then dropped. Yields climbed. Investors now ask for higher returns as risk grows. Ten-year Treasury yields hit 4.5%, up from 3.9%. Meanwhile, 30-year yields moved past 5%. This jump alarmed many economists.

Mark Manger, director of the Global Economic Policy Lab at the University of Toronto’s Munk School, has studied debt crises in Argentina and Nigeria. He sees this rise as strange in the market known for safety. “It is the part where observers are starting to freak out,” he said. His words show that investors now worry that rising yields harm the famed U.S. Treasury bond.

Higher yields also mean that paying back debt may hurt the economy. The U.S. Treasury market, a key part of global finance, may no longer seem the safest spot.

Potential Global Fallout

This warning goes far beyond the U.S. U.S. Treasuries and similar bonds sit at the heart of debt markets. Many banks, pension funds, and central banks hold them. A drop in their value might shake global finance.

Juan Carlos Hatchondo, an economics professor at Western University, studies sovereign debt. He explained that U.S. Treasuries work as collateral in repo deals. These deals help banks keep cash flowing overnight. If their value falls, liquidity in the system will suffer.

Foreign governments also hold these bonds. A drop in value would hurt their reserves and worsen economic shocks. In our connected system, one bad sign may start a global chain reaction.

The Looming Crisis?

A February 2025 study by the Brookings Institution said that a full U.S. default is not needed to cause a crisis. The fear of a strategic default or poor fiscal management alone might shake faith in U.S. debt. This loss of trust lowers asset values, weakens banks, and may spark a worldwide recession.

Reports from the Financial Post note that the debt crisis is not only in Washington. From Canada to the U.K. and Japan, high debts unsettle markets. Yet, the U.S. holds a special weight on the world scene. Its fiscal health can shift global economics.

What Lies Ahead?

With Canada’s Federal Budget on November 4th and similar events around the globe, all eyes are on governments. Political gridlock, high debt, and fears over safe assets put policymakers to the test.

For now, soaring U.S. government debt darkens the future of financial stability. The coming financial crisis may depend on how well the U.S.—the largest economy—manages its fiscal path and how investors see these moves.

For continued in-depth analysis on government debt and its global implications, visit FinancialPost.com and stay tuned for daily updates throughout the fiscal season.

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Major Banks Follow Bank of Canada: Prime Rate Cuts Make Borrowing Cheaper!

Canadian Banks Lower Prime Rates Following Bank of Canada’s Cut

October 29, 2025 – The Bank of Canada cut its policy rate. Canadian banks then lowered their prime lending rates by 25 basis points. On October 30, the prime rate drops from 4.70% to 4.45%.

On Wednesday, the Bank of Canada lowered its policy rate by a quarter point to 2.25%. It did this to boost economic activity. Major banks acted quickly. Royal Bank of Canada, TD Canada Trust, Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Desjardins Group, Laurentian Bank of Canada, and Bank of Nova Scotia all changed their rates.

The prime rate is a key benchmark. It guides lending on lines of credit, variable-rate mortgages, and loans. Lowering the prime rate cuts borrowing costs. Consumers and businesses then spend and invest more.

This move is part of a wider monetary plan. The plan works to control inflation and aid growth. Cutting prime rates helps lower borrowing costs for households and companies.

Financial experts say borrowers should note these changes. Lower prime rates can reduce interest on variable-rate debts. They also create better conditions for new loans.

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Red Ink Rising: How Exploding Government Debt Could Trigger the Next Financial Crisis

How Soaring Government Debt Could Play a Starring Role in the Next Great Financial Crisis

By Barbara Shecter | Published Oct 27, 2025

Governments around the world carry heavy debt. They face rising worry about what this debt may cause. The United States, which drives the global economy, sits in a risky spot. If the U.S. runs into fiscal trouble, markets everywhere may fall hard.

The Increasing Burden of Sovereign Debt

Sovereign debt climbs fast in recent years. Pandemic costs, economic boosts, and budget gaps push the debt higher. The U.S. holds about US$37 trillion in debt. It runs a yearly deficit near US$1.8 trillion – about six percent of its GDP. Even as people like Elon Musk plead for less spending, the deficit barely slows down.

Many countries grow their debt too. Yet the United States matters more because it issues U.S. Treasury securities. These bonds support global finance. Pension funds, banks, and foreign governments all hold large amounts of them.

Troubling Signs from the Treasury Market

This year, market changes signaled trouble. After President Donald Trump set steep tariffs on over 80 countries – a day some called "Liberation Day" – investors ran from unstable stocks. They moved into U.S. Treasury bonds, and yields dropped. Soon, yields on 10-year bonds jumped from 3.9% to 4.5%. Thirty-year yields went past 5%.

When yields rise, bond prices drop. This fall shows that investors worry about U.S. debt. Mark Manger from the University of Toronto’s Munk School pointed out that this move looks like a warning seen in risky markets like Argentina or Nigeria. He said, "This is the part where observers start to freak out… because it’s not supposed to be like this."

Risks of a U.S. Debt Crisis

A drop in trust for U.S. Treasuries has huge risks. Investors see U.S. debt as the benchmark safe asset. A crisis here can shake global markets. It may lower asset prices, unsettle banks, and push economies into recession.

Research from the Brookings Institution explains that a crisis need not wait for a default. The fear of unsustainable debt may trigger panic and capital flight.

Juan Carlos Hatchondo from Western University highlights the risk. U.S. Treasuries often act as collateral in repo deals. If their value falls sharply, daily banking and market trades can break down. Many foreign governments store reserves in U.S. debt. A drop in value may weaken their finances and spread instability today.

Political Challenges Compound the Problem

The debt issue worsens with U.S. political fights. Sharp political divides make sound fiscal plans hard. Sudden policy shifts, like those seen after the tariff move, hurt market trust. This doubt stops leaders from taking clear steps to fix the debt. In the near term, any plan to manage the swelling debt seems hard to reach.

Looking Ahead

With the November 4 Federal Budget near, Canada and other nations face their own debt matters in a tougher world. Yet the U.S.—with its large role in finance—stays the main focus.

Investors, policymakers, and economists keep a close watch. High government debt, tense political fights, and shaky markets mix into a storm. This storm might lead to the next great financial crisis, one with global consequences.

For continuous coverage of sovereign debt and deficits, stay tuned to FinancialPost.com.

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EQB Announces 8% Workforce Reduction: A Strategic Restructuring in Canada’s Banking Sector

EQB Announces 8% Workforce Reduction Amid Restructuring Efforts in Canada’s Banking Sector

October 23, 2025 — EQB Inc., which runs Equitable Bank (Canada’s seventh largest by assets), will cut its workforce by eight per cent. The bank makes these changes to work more efficiently. It is the latest layoff in Canada’s banking scene this year.

Details of the Restructuring Plan

On Wednesday, EQB said its restructuring will cost about $67 million. This cost covers worker cuts and impairment charges. The fourth‐quarter report will show these expenses. Analysts say about 160 full-time jobs will end.

Chadwick Westlake, EQB’s CEO, said, "We are taking action for the future. We make firm decisions that boost productivity. These moves improve our operating leverage and efficiency ratio. We are ready to capture new profit opportunities." He noted that the bank will reignite its core, grow its line of products, and build world-class operations.

Industry Context and Analyst Perspectives

EQB’s decision came soon after the Bank of Nova Scotia cut an unknown number of jobs. Toronto-Dominion Bank also planned a two per cent cut in May. Darko Mihelic, an analyst at Royal Bank of Canada, called EQB’s change "hesitantly positive." He said, "We expected EQB to take a restructuring charge. However, an eight per cent cut is larger and came sooner than we thought. We still see EQB as a fast-growing company."
Mike Rizvanovic, an analyst at the Bank of Nova Scotia, added that the cuts help fight expense headwinds. He warned that such a drop in jobs might hurt morale since EQB has not faced such layoffs in recent years.

Broader Banking Sector Trends

EQB’s layoffs join a trend in Canada’s banking sector. Many banks now restructure to cut costs and work more efficiently. They face tough market conditions and stronger competition. Financial experts watch keenly to see how these changes will affect EQB’s growth, employee spirit, and service quality moving forward.

For further coverage and detailed analysis, subscribe to Financial Post for exclusive insights and updates from Canada’s financial sector.

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Canada Takes Bold Steps Against Financial Fraud: Announcing a National Anti-Fraud Agency and Strategy

Canada Unveils National Anti-Fraud Strategy and Establishes New Financial Crime Agency

By Naimul Karim, Financial Post — October 20, 2025

The Canadian government fights fraud. It launches a national anti-fraud plan and creates a new financial crime unit. Finance Minister François-Philippe Champagne spoke at a press event on Monday. His words stress the need to act fast as fraud grows.

Escalating Financial Fraud Sparks Government Action

Financial fraud in Canada climbs high. Losses jumped 300 percent since 2020. The Canadian Anti-Fraud Centre shows Canadians lost about $643 million in 2024. Only 5 to 10 percent of scams get reported officially. The Canadian Bankers Association sees fraud costing about $11 billion each year. That loss equals roughly 0.53 percent of the country’s GDP.

Fraud touches many areas. Scammers use text, email, and social media to reach victims. Minister Champagne said, “Firms in technology, telecommunication, and finance must step up.”

Key Components of the National Strategy

The strategy comes with next month’s federal budget. It tells banks to use strong rules to fight fraud. This step aims to protect Canadians. Seniors, for example, lost $176.6 million last year.

The government will also work with banks and other groups on a voluntary code. This guide helps banks spot and stop economic abuse. It offers clear steps to keep customers safer.

A New Agency Dedicated to Fighting Financial Crime

Minister Champagne now sets up a new federal agency. This agency leads the fight against fraud, money laundering, and related crimes. It also works to recover stolen money. The move shifts from scattered efforts to a focused plan.

Special experts will head this agency. Champagne noted, “You need people with strong investigative skills who can target organized crime.” New laws and changes will support this step. The government plans to act quickly.

Broader Government Commitment

Multiple agencies already work on fraud in Canada. Yet, as scams evolve, a more unified response is needed. Minister Champagne stresses more teamwork between banks and government bodies.

Canada faces rising financial crime. This plan, with easier rules and focused action, aims to restore trust in the financial system and protect all Canadians.

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Scotiabank’s Workforce Transformation: A Year of Layoffs Amid Corporate Restructuring

Scotiabank Announces Layoffs Across Multiple Departments Amid Organizational Transformation

By Naimul Karim | Published October 17, 2025

Scotiabank—the Bank of Nova Scotia—has started layoffs in Canada. The bank did not reveal the number of positions. Sources confirm that layoffs have run since September.

A Strategic Shift Towards Efficiency and Growth

The bank shifts focus. Scotiabank uses its resources to grow and work more efficiently. In a statement late in September the bank said it must manage resources well to serve clients and keep growth steady.

“Aligning our organization and our resources around our focus areas for growth, including finding ways to be more efficient, is a part of managing our bank effectively,” the bank said. “We will continue to prioritize and invest in areas that best meet the needs of our clients and deliver sustainable growth.”

Aris Bogdaneris, head of Scotiabank’s Canadian business, sent a memo to staff. He said a change this big is hard. He noted the bank must cut back on tasks that take time and add little value.

Employee Experiences and Communication

Employees got short, tight messages. One HR team member said a call informed them about the staff cuts, but there was little chance to ask questions. Staff talk shows that cuts come from many parts of the bank.

Return-to-Office Policy and Broader Industry Context

The layoff news came after a return-to-office announcement. This marked a big change after long remote work. Scotiabank is not alone. In May, Toronto-Dominion Bank cut about two percent of its workforce as changes began.

Looking Ahead

Scotiabank now aims to blend efficiency with client needs and growth. The bank has not given more details on further cuts or future changes.

These events mark a clear shift in Canada’s financial world. Banks adjust as economic and work-place trends evolve.

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BMO’s Bold Strategy: Selling 138 U.S. Branches to First-Citizens Bank While Expanding with 150 New Locations

BMO to Sell 138 U.S. Branches to First-Citizens Bank, Plans to Open 150 New Locations Mainly in California

October 16, 2025 | Financial Post

BMO announced a plan. It will sell 138 U.S. branches to First-Citizens Bank & Trust Co. and open 150 new branches in the next five years. The new branches will be built mainly in California. Each word links closely to the next. This simple chain helps you follow the news easily.

Branch Sale Focused on Midwest Locations

BMO sells branches in the American Midwest. The sale covers branches in North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma, and Idaho. It also includes selected branches in Minnesota, one branch in Oregon, and one in Illinois. First-Citizens Bank takes these branches. It also gets about US$5.7 billion in deposits and buys roughly US$1.1 billion in loans. At closing, BMO receives a net deposit premium of five percent. Each fact connects closely to its description.

Expansion Strategy Targeting Growth Markets

After the sale, BMO plans to open 150 new branches. The bank picks U.S. markets with real growth. It focuses mainly on California but will not limit itself to that state. BMO wants to reach more clients and build stronger ties. "This reallocation allows us to deepen client relationships and deliver the full power of BMO to our clients," said Aron Levine, BMO’s U.S. president. For him, each branch is a place for financial advice and a community hub. Every phrase links directly to its purpose.

Financial Impact and Timeline

BMO expects a goodwill impairment charge of about US$75 million. This charge will appear in the fourth quarter, before and after tax. The bank also sees a US$85 million tax expense at closing. The transaction needs regulatory approvals and customary closing conditions. The deal is set to close by mid-2026. Short words and clear links keep the story easy to read.

Looking Ahead

BMO makes a clear choice. It sells smaller or less profitable branches while focusing on high-growth regions. This change helps the bank serve customers and communities more effectively. The realignment strengthens BMO’s position in the U.S. financial markets. Each sentence builds on the last to form a clear chain of ideas.

For further details or inquiries: Naimul Karim at nkarim@postmedia.com

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BMO CEO Urges Canada: Time for Action to Boost Economic Competitiveness and Trade

BMO CEO Voices Concern Over Canada’s Waning Focus on Economic Growth and Trade Barriers

By Naimul Karim | Published October 15, 2025

At the Toronto Global Forum on Wednesday, Darryl White, the CEO of Bank of Montreal, raised concerns about Canada’s slow move on economic growth. He pointed out that Canada talks much about strong economics. However, his speech stressed the need for clear, fast steps. Canada must cut internal trade barriers and build key infrastructure to keep growing. White warned that without real actions, Canada may lose ground, especially when U.S. tariffs challenge it.

A Call for Action Over Conversation

White said, "We need a little less conversation and a little more action." His words link removing trade barriers with speeding up infrastructure projects. These actions aim to fight the economic strain caused by U.S. tariffs. He noted that while talks about tariffs show Canada’s natural resources, the energy in these discussions is at risk. Without firm measures, the country may fall behind.

Tax Competitiveness a Key Concern

White also stressed problems with Canada’s tax rates. He said Canadian taxes are not as low as those in other countries. This fact does not get enough talk in policy circles. "Are we competitive in tone? Are we competitive on tax? I know the answer to that is absolutely not, and that’s not being talked about enough," he said. He explained that investors follow easy paths. Rhetoric on its own will not keep international capital in Canada. White warned that unless changes come, even those attracted by recent positive talks may soon leave.

Internal Trade Barriers: An Opportunity to Strengthen the Economy

White believes that cutting internal trade barriers may boost Canada’s economy. He argued that these actions could cancel out the shocks from uncertain trade talks under CUSMA. This agreement, which helps most Canadian exports to the U.S. avoid tariffs, will be renegotiated next year. White said, "Acting quickly within our own borders to enhance trade fluidity could overwhelm almost any adverse impacts from trade negotiations abroad." He noted that while dealings with the U.S. are on the right track, domestic reforms must come now.

Navigating a Shifting North American Trade Landscape

White discussed U.S. trade policy as well. He said that although the U.S. shows an "America First" approach, it does not mean complete isolation. He claims Canada can still play an important role. "Canadians might not like to hear it, but if Canada were second in an America-first world, this notion of North American advantage starts to become real," he said. Despite tension in the media and politics, both nations work hard to use their strengths.

BMO’s Strong Quarterly Performance Amid Economic Unease

During the talk, White noted BMO’s strong quarterly results. He recognized that major Canadian banks enjoyed a good report. Still, he warned that not all parts of the economy show the same strength. He mentioned that while investment banking and wealth management perform well, slow loan growth and rising credit issues on "Main Street" pose worries. White explained, "Earnings headlines are driven by averages, so caution is warranted. It’s like having your feet in the freezer and your head in the oven—you feel fine on average, but it’s pretty uncomfortable."

Looking Ahead

White is also worried about Canada’s unemployment rate, now at 7.1 percent. He sees labor market challenges that could affect the broader economy if ignored. As Canada prepares for tough trade talks and reforms inside its borders, White’s message is clear. The country must move from talk to action on tax issues and trade barriers. Quick, focused changes are needed for a strong economic future.

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The Resilience of Micro Condos: Why These Small Spaces Will Thrive Amid Market Challenges

Why Micro Condos Will Survive the Current Housing Market Downturn

By Garry Marr, Financial Post – October 15, 2025

Micro condos are small. They measure about 300 square feet. They sit in busy downtown cores like Toronto and Vancouver. Lately, buyers and investors find them less attractive. Yet one real estate expert says these small units will last. They will stay in the housing market as conditions change.

The Current State of Micro Condos

Micro condos were once in high demand. The real estate boom and the pandemic fueled a fast pace of building. Developers built many small units for city dwellers. They aimed to provide affordable homes with rich amenities.

Investors now step back. They see weak capital returns and uncertain rental income. First-time buyers also hesitate. High prices and steep interest rates push them away, even as rents drop. Families have shown little interest too. All these factors lower demand.

Buyer Behavior and Market Dynamics

Greg Zayadi, president of Rennie & Associates Realty Ltd., notes that many buyers pause at the closing stage. They often withdraw from deals. These units need smaller deposits. A small deposit makes it easier for buyers to exit if problems arise. Developers then face the cost of lost pre-sale deposits. This leaves many units unsold.

For example, Vancouver has 12,354 unsold micro condos in Q3. That is a 16% rise from the previous quarter. Prices fall between $950 and $1,200 per square foot. Now, values are near 20% below their peak. Zayadi thinks it may take two years to clear this stock.

Challenges for the Micro Condo Market

New micro condo projects face hard challenges. Builders now struggle to match price, size, and amenity needs. Buyers look for larger units at lower costs. They want homes that suit end-users rather than investors. Technical issues stop developers from combining several small units into one large unit. Plumbing, electrical work, and high renovation costs create obstacles.

Brad Burns, senior associate and design director at Gensler, shares a saving grace. In the student housing niche, micro and nano units work well. In Vancouver projects, units as small as 160 square feet serve students. They offer a full bath, a cooking space, and a work area. Furniture and shared tools add extra help.

The Future of Micro Condos

Micro condos lose their shine for some buyers and investors. Still, experts like Burns and Zayadi see a lasting role. For single people and students, tiny and smart units hold real value. Urban life and minimalism keep these condos in style.

Even if the market calls for larger and cheaper housing, micro condos will not vanish. They will change and serve specific groups. They remain part of the evolving housing scene.

Photo Caption: A 268-square-foot micro condo in Montreal’s Griffintown area includes a pull-out couch to maximize limited space. (Photo by John Mahoney / Montreal Gazette)

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Unlocking Extra Space: A Smart Strategy to Expand Your Home Without Moving

Here’s One Way to Increase the Size of Your House Without Moving

By Garry Marr, Financial Post, October 10, 2025

If you fear moving to a larger home, try a different plan. Many Canadians shed clutter and use self-storage. The housing market now drops prices by near 20% in some parts. The economy may stall, so people rethink how they use their rooms and things.

Decluttering: More Than Just Tidying Up

This trend is not about body shaming. It cuts the extra load of junk in your home. Most people own basements, garages, or spare rooms that hold items rarely used. Experts say these spaces hide "treasure" that one later sells for little, donates, or throws away. They warn that using living space as storage may cost more than paying for an outside option.

Home prices in cities such as Toronto top about $1,000 per square foot. Money spent on keeping unused items inside adds up quickly.

Self-Storage: The Thriving Industry

Here, the self-storage industry steps in. Canadians now use it more, nearing Americans who have almost twice as much storage per person. Ontario Municipal Property Assessment Corporation said Ontario has 7.3 million square feet of self-storage. That area equals roughly 2,200 NHL ice rinks. The space grew by 11% from 2020 in just three years. It does not slow much even if the housing market does.

Companies like 1-800-GOT-JUNK? now run over 175 franchises in Canada, the United States, and Australia. They help people downsize and sort their items. James Alisch, Chief Revenue and Operating Officer, notes that many Baby Boomers now downsize. Families then figure out what to keep, store, or toss.

Why Canadians Are Choosing Storage

Many factors drive the surge in self-storage:

• Homes now offer smaller spaces with fewer garages or basements.
• Higher home costs force better space use.
• Events like marriage, children, or downsizing add storage needs.
• Economic doubts block moves while boost storage needs.

Danny Freedman, Interim CEO of Forum Make Space, leads a firm that runs about 28 storage centers in Canada. He notes that a pandemic once raised use, and even after a small drop, demand stays high. New storage builds cost more. This fact lifts rental rates.

The Hidden Cost of Keeping Untamed Clutter

Many homes lose room use when they turn a space into storage. When you compare the cost of owning or renting a storage unit with lost room value, the storage cost can seem a good deal. Decluttering and using outside storage can make your house feel larger. This plan works without the stress or price of moving.

A Resilient Market

Investors now back self-storage. They see it as a safe bet amid long-lasting life trends. Colliers International says that even if new supply changes rates a bit, buyer trust remains strong. Growth in storage comes from steady life changes. This trend goes beyond simple economic ups and downs.

Final Thoughts: Declutter to Expand Your Living Space

For many Canadians, tight living spaces make life hard. Decluttering with self-storage can add extra room. Moving is one way to gain space, but smart use of what you own can work, too. It saves money and avoids the pain of relocating.

If you feel stuck with too much clutter or do not know where to start, many companies help remove junk and guide you in sorting your things.

This article is part of ongoing coverage on real estate and personal finance trends. Subscribe for full access to Financial Post content, including expert insights and market analyses.

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