One of the unexpected by-products of the COVID pandemic was a spike in how much Canadians were putting away in savings accounts. Five years ago, the national savings rate had fallen to just two-percent of our income.
When the pandemic forced the closure of entertainment venues, we put that money into a rainy-day fund as our savings rate jumped up to more than 7-percent, money that would spur growth or provide a buffer against higher mortgage payments at renewal time.
Or, at least that was theory. The economists at CIBC Capital Markets have a slightly different view.
They say the savings figure is misleading and they doubt we have hordes of cash lying around in savings accounts. They say the bank’s deposits don’t show that. And part of it may be the way we count these things. For example, money spent on renovations or new houses during the pandemic was classified as residential investment but it showed up as savings because our net worth went up even though our cash accounts were de
