As economic conditions evolve and regional pressures shift, Canadians are saving more money, but the amount depends on which province they live in, according to a new report.
Desjardins’ latest economic viewpoint found Albertans saved nearly nine per cent of their disposable income between 2020 and 2023, the highest in Canada, and well above the national average of under four per cent.
Researchers found Albertans were able to save more as they had, on average, a household disposable income of over $110,000 while affordability in the province was among the best in the country. Savings rates are also high in Saskatchewan and Quebec with levels approaching 10 per cent of disposable income in 2024. The national average disposal household income in 2024 was $100,000.
“You have Alberta close to $120,000 household disposable income and Saskatchewan is a bit above average,” Sonny Scarfone, principal economist for Desjardins told BNNBloomberg.ca in a Monday interview.
“I would say, for these two provinces, it’s a mix of high disposable income and relatively affordable housing compared to B.C. and Ontario, especially. For Quebec, it’s mostly on the spending side, just in absolute terms, spending less than other provinces.”
Households in Ontario and British Columbia meanwhile are navigating higher debt levels, driven by housing costs, mortgage renewals, and slower income growth, all of which may weigh on future consumption and savings.
Homeowners in the relatively more affordable Quebec housing market are less vulnerable to ongoing mortgage renewals than in other provinces. That however is starting to decline, Scarfone said.
“We do see affordability declining and more of a catching up. In absolute terms, prices have been increasing for housing, although on the relative basis that remains affordable compared to B.C. and Ontario,” he said . “We do forecast that the Quebec savings rate will remain somewhat elevated, of course, depending on the commercial tariffs outcome there.”
The average national savings rate, calculated as a percent of disposable income instead of spending, is expected to increase from 3.7 per cent in 2023 to six per cent in 2024 according to data from Statistics Canada and Desjardins Economic Studies.
Alberta had a savings rate of 8.8 per cent in 2023, Quebec was at 7.8 per cent and Saskatchewan was not far behind at 7.5 per cent in 2023.
Prince Edward Island was at 2.8 per cent, Ontario at 1.7 per cent, British Columbia at 0.6 per cent and Newfoundland and Labrador at 0.2 per cent. New Brunswick was down -1.6 and Nova Scotia was -3.7.
Canadians expected to save more
Desjardins predicts Canadians across the country will continue to save for the future despite ongoing income pressures. Albertans made over $115,000, British Columbians had $110,000 and Ontarians made $105,000 in 2024. Scarfone noted households saving more leads to higher resiliency especially in uncertain times such as U.S. President Donald Trump’s trade war.
“One of the reasons we’re interested in looking at saving behaviour is that in terms of uncertainty, saving for a rainy day can become self fulfilling in terms of uncertainty leads to households being more prudent in their spending,” said Scarfone. “That prudence itself contributes to lower consumption, which is reflected by lower GDP. So that behaviour is interesting in the context that we’re in today, and also it does help us in our forecast in terms of forward looking at who would be more financially resilientif a slowdown was to come.”
In Quebec, the average household disposable income was just under $84,000 in 2024, comparable to New Brunswick and lower than all other provinces, yet they were one of the highest savers in the country.
Changes to personal income tax
Researchers expect national-level household disposable income growth to accelerate in 2025 in part supported by recent federal personal income tax changes.
The government recently announced a plan to reduce the personal income tax rate from 15 per cent to 14 per cent as of July 1. It will also be the rate for most federal non-refundable tax credits.
Desjardins noted Quebec and Alberta households are likely to face less pressure from mortgage renewals than households in British Columbia and Ontario.
Households to spend less on luxury goods
While researchers anticipate an increase in savings, they also expect a broad slowdown in consumer activity in the coming quarters, with the steepest declines in spending on luxury items.
Households are likely to scale back on big-ticket purchases due to the combined impact of the ongoing trade war, through higher prices and increased uncertainty, and a soft housing market.
