I like to see what our neighbours in Quebec are thinking about the pandemic. In the March edition of the Quebec magazine L’acualité there is an article entitled “Comment Vieillir Riche Malgré La Pandémie” which we can translate into English as “How to Grow Rich in Spite of the Pandemic”.
One part of the article can be translated as “When the Pandemic Hit in March 2020”. What did it say? It was about a pianist Jérôme Beaulieu who returned from France after playing in some jazz concerts. He quickly lost 75% of his revenue due to cancelled engagements. He and a singer joined forces to offer handyman/renovation services but he did have some experience as he learnt from his builder father. Like 2 million other Quebecers he took CERB benefits.
By the end of April 2020 one man out of five and one women out of 4 were unemployed in Quebec. The HEC Institute in Quebec noted that 29.5% of Quebec households had a change in the status of employment. Yet weekly wages in the first five months of 2020 were 7.2% greater than in the same period in 2019. 55% of households experienced a decline in household income. So not everyone was on the losing end.
The article gave an example of a man Felix Cadotte that was working in technology and ecology in Sorel Quebec whose job was changed into full time from being part time. He eliminated wardrobe costs, restaurants and sold one of his two cars so he had a full-time job with less expenses which enabled him to accelerate his savings for a new home and a baby on the way! Quebecers were forced into a life of involuntary simplicity and rediscovered the virtues of staying at home and saving. As Natalie Bachand the president of a non profit group promoting savings in Quebec said,” The pandemic has made us realize the superfluous amount of money spent on trips, vacations and restaurants. And when all this disappears we see our real needs.”
According to a June 2020 survey conducted by SOM 85% of Quebecers reduced their consumption and 59% eliminated or cut an important expense. 50% of Quebecers reviewed their budget and financial priorities two thirds of those as a matter of prudence and not as an obligation. One half of those surveyed wished to be better prepared for the next crisis.
Pierre Leblanc president of a trustee in bankruptcy company Groupe Leblanc noted many had reduced their monthly expenses by $400-$800.
The savings rate of Canadians was 27.5% in the second quarter of 2020 whereas it was 2% in the fourth quarter of 2019 according to Statistics Canada.
Louis-Bernard Dubé a financial planner with iA Group in Terrebonne noted that many people panicked with the fall of the stock markets between the 23rd of February and the 20th of March in 2020 but in six months the markets rebounded to where they were prior to the slump. Dubé noted, “Those that kept a level head and did not sell ended up in the same situation. Those who sold for the most part ended up losing.”