Has Prosperity Been an Illusion?
An Illusion Many Just Won’t See?
What the mainstream just won’t tell you
By Jim Taylor – Canadian SentinelMost Canadians have been told a comforting story for the last twenty years.
We are, we’re told, a prosperous country. The job market is “resilient.” Inflation is “under control.” Our banks are “rock solid.” And yes, there are “pockets of hardship,” but overall we’re doing just fine.
Now set the talking points aside and look at what’s actually happening on the ground.
• Roughly half of Canadian households say they are $200 or less away from not being able to pay all their monthly bills.
• Consumer insolvencies are at 15-year highs, not far off the numbers we saw after the 2008–09 crash.
• A growing share of those are consumer proposals – formal arrangements where people promise to repay a portion of their debts just to avoid the final humiliation of bankruptcy.
• Food bank usage has exploded, more than doubling in just a few years.
• School breakfast and lunch programs are overloaded, because more kids are arriving hungry.
• Seniors on fixed incomes are making quiet, brutal choices between groceries, heat and prescriptions.
If this is “prosperity,” it’s a strange version of it.
The $200 line: one bad month from the edge
Start with that $200 figure.
When surveys say that around 48% of Canadians are $200 or less away from being unable to cover their bills, that means:
• A property tax increase
• A rent hike
• A jump in car insurance
• A broken furnace, or a dental bill
…is the difference between “barely coping” and falling behind for good.
There is no real buffer. No savings, no slack, no margin for error. That’s not how a broadly prosperous society behaves. That’s how a tired, maxed-out society looks just before the wheels start coming off.
Insolvent, but still trying to pay
When people finally reach a point where the numbers no longer work, they don’t usually march straight into bankruptcy.
Most will do almost anything to avoid losing the house and the car:
• They triage their bills: mortgage and car first, then food and utilities, and everyone else gets whatever scraps are left.
• They cut back on everything: food, clothing, social life, even necessary medical or dental care.
• When there’s nothing left to cut, they start borrowing to survive – putting groceries, hydro and gas on credit cards and lines of credit.
By the time some of these households sit down with a Licensed Insolvency Trustee, they’ve already burned years making minimum payments, feeding a system that has kept them on the treadmill without ever really reducing the debt.
That’s where consumer proposals come in.
A proposal is a formal deal under federal law where:
• You admit you’re insolvent.
• Your trustee negotiates with your creditors so you pay only part of what you owe, over time.
• Interest stops. Collections stop. Lawsuits and wage garnishments stop.
• You make one fixed monthly payment for up to five years.
• When you’re done, the rest of the unsecured debt is legally wiped out.
In most cases, people use proposals to keep their home and their vehicle, and to avoid the stigma and legal consequences of bankruptcy. It’s the last stand:
“If you’ll cut the total and stop the interest, I’ll keep paying as much as I realistically can.”
The fact that proposals now make up the majority of consumer insolvencies tells you something: most insolvent Canadians are still desperately trying to meet their obligations – they just can’t do it under the terms the system has imposed on them.
The interest trap: why people “do everything right” and still lose
At the heart of this story is interest and the way our financial products are structured.
On paper, interest is simply the price of using someone else’s money. In practice, it’s a trap for anyone living too close to the edge.
• Credit cards charge interest in the high-teens or twenties, while minimum payments are set deliberately low (often 2–3% of the balance).
• If you only ever pay the minimum, a $5,000 balance can sit there for decades, costing you more in interest than you ever borrowed.
• Mortgages are sold as “building equity,” but with long amortizations and high prices, the bulk of each payment in the early years is interest, not principal.
So a family can:
• Pay faithfully for years,
• Watch thousands of dollars vanish into interest charges,
• And discover that they are no closer to freedom than they were when they started.
Then, when they finally buckle under the weight of it all, the system they’ve been feeding for years turns around and brands them “high risk.”
Human cost: not just numbers on a spreadsheet
We talk about insolvency as if it is an accounting event. It is not.
It is a human event.
Behind every bankruptcy file and consumer proposal are stories like these:
• Parents skipping meals so the kids can eat.
• Children relying on school breakfast and lunch programs because there’s not enough food at home.
• Elders cutting pills in half or skipping doses to save money, praying nothing serious happens.
• Marriages fraying under the constant stress of “not enough.”
• People numbing themselves with alcohol or drugs because the anxiety never lets up.
• Nights staring at the ceiling, wondering what happens when the next bill arrives.
You won’t find those numbers neatly summarized in a government budget or a bank’s annual report. But you will find them in food bank lineups, school cafeterias, and hospital waiting rooms.
Governments are playing the same game
Here’s the uncomfortable part almost nobody in mainstream commentary wants to admit:
Governments are doing a more sophisticated version of exactly the same thing.
When there is no political appetite for serious cuts or reforms, and no courage to tell voters “we can’t afford this,” the default answer is:
Borrow more and hope for the best.
• Ottawa is running large, ongoing deficits and piling on hundreds of billions in new debt.
• Provinces, including B.C., are doing the same.
• Interest costs on that debt are rising fast, eating a larger share of every tax dollar.
That is the public-sector version of “just making the minimum payment” while the balance grows.
In other words, the system expects households to get out of debt and “act responsibly,” while every level of government keeps leaning on the same addiction to borrowed money that helped create this mess in the first place.
So has prosperity been an illusion? Not entirely. We did have genuine gains over the decades: technology, healthcare, living standards. But a huge chunk of what we called “prosperity” in the last twenty years has turned out to be:
• Borrowed money,
• Inflated asset prices, and
• A political and financial story carefully crafted to avoid hard truths.
When half the country is $200 away from not paying the bills, when insolvencies climb back toward Great Recession levels, when food banks and school lunch programs are bulging at the seams, we are not talking about a “few vulnerable people.”
We are talking about a system-wide failure.
The real question is not whether some Canadians have lived well. Clearly, they have.
The question is whether the model itself was ever sustainable – or whether it was always an illusion that many people, by design, were never going to win.
You won’t hear that on the evening news.
But if you listen carefully in the grocery aisle, in the schoolyard, at the seniors’ centre, and in the trustee’s office, you’ll hear it everywhere.
We are, we’re told, a prosperous country. The job market is “resilient.” Inflation is “under control.” Our banks are “rock solid.” And yes, there are “pockets of hardship,” but overall we’re doing just fine.
Now set the talking points aside and look at what’s actually happening on the ground.
• Roughly half of Canadian households say they are $200 or less away from not being able to pay all their monthly bills.
• Consumer insolvencies are at 15-year highs, not far off the numbers we saw after the 2008–09 crash.
• A growing share of those are consumer proposals – formal arrangements where people promise to repay a portion of their debts just to avoid the final humiliation of bankruptcy.
• Food bank usage has exploded, more than doubling in just a few years.
• School breakfast and lunch programs are overloaded, because more kids are arriving hungry.
• Seniors on fixed incomes are making quiet, brutal choices between groceries, heat and prescriptions.
If this is “prosperity,” it’s a strange version of it.
The $200 line: one bad month from the edge
Start with that $200 figure.
When surveys say that around 48% of Canadians are $200 or less away from being unable to cover their bills, that means:
• A property tax increase
• A rent hike
• A jump in car insurance
• A broken furnace, or a dental bill
…is the difference between “barely coping” and falling behind for good.
There is no real buffer. No savings, no slack, no margin for error. That’s not how a broadly prosperous society behaves. That’s how a tired, maxed-out society looks just before the wheels start coming off.
Insolvent, but still trying to pay
When people finally reach a point where the numbers no longer work, they don’t usually march straight into bankruptcy.
Most will do almost anything to avoid losing the house and the car:
• They triage their bills: mortgage and car first, then food and utilities, and everyone else gets whatever scraps are left.
• They cut back on everything: food, clothing, social life, even necessary medical or dental care.
• When there’s nothing left to cut, they start borrowing to survive – putting groceries, hydro and gas on credit cards and lines of credit.
By the time some of these households sit down with a Licensed Insolvency Trustee, they’ve already burned years making minimum payments, feeding a system that has kept them on the treadmill without ever really reducing the debt.
That’s where consumer proposals come in.
A proposal is a formal deal under federal law where:
• You admit you’re insolvent.
• Your trustee negotiates with your creditors so you pay only part of what you owe, over time.
• Interest stops. Collections stop. Lawsuits and wage garnishments stop.
• You make one fixed monthly payment for up to five years.
• When you’re done, the rest of the unsecured debt is legally wiped out.
In most cases, people use proposals to keep their home and their vehicle, and to avoid the stigma and legal consequences of bankruptcy. It’s the last stand:
“If you’ll cut the total and stop the interest, I’ll keep paying as much as I realistically can.”
The fact that proposals now make up the majority of consumer insolvencies tells you something: most insolvent Canadians are still desperately trying to meet their obligations – they just can’t do it under the terms the system has imposed on them.
The interest trap: why people “do everything right” and still lose
At the heart of this story is interest and the way our financial products are structured.
On paper, interest is simply the price of using someone else’s money. In practice, it’s a trap for anyone living too close to the edge.
• Credit cards charge interest in the high-teens or twenties, while minimum payments are set deliberately low (often 2–3% of the balance).
• If you only ever pay the minimum, a $5,000 balance can sit there for decades, costing you more in interest than you ever borrowed.
• Mortgages are sold as “building equity,” but with long amortizations and high prices, the bulk of each payment in the early years is interest, not principal.
So a family can:
• Pay faithfully for years,
• Watch thousands of dollars vanish into interest charges,
• And discover that they are no closer to freedom than they were when they started.
Then, when they finally buckle under the weight of it all, the system they’ve been feeding for years turns around and brands them “high risk.”
Human cost: not just numbers on a spreadsheet
We talk about insolvency as if it is an accounting event. It is not.
It is a human event.
Behind every bankruptcy file and consumer proposal are stories like these:
• Parents skipping meals so the kids can eat.
• Children relying on school breakfast and lunch programs because there’s not enough food at home.
• Elders cutting pills in half or skipping doses to save money, praying nothing serious happens.
• Marriages fraying under the constant stress of “not enough.”
• People numbing themselves with alcohol or drugs because the anxiety never lets up.
• Nights staring at the ceiling, wondering what happens when the next bill arrives.
You won’t find those numbers neatly summarized in a government budget or a bank’s annual report. But you will find them in food bank lineups, school cafeterias, and hospital waiting rooms.
Governments are playing the same game
Here’s the uncomfortable part almost nobody in mainstream commentary wants to admit:
Governments are doing a more sophisticated version of exactly the same thing.
When there is no political appetite for serious cuts or reforms, and no courage to tell voters “we can’t afford this,” the default answer is:
Borrow more and hope for the best.
• Ottawa is running large, ongoing deficits and piling on hundreds of billions in new debt.
• Provinces, including B.C., are doing the same.
• Interest costs on that debt are rising fast, eating a larger share of every tax dollar.
That is the public-sector version of “just making the minimum payment” while the balance grows.
In other words, the system expects households to get out of debt and “act responsibly,” while every level of government keeps leaning on the same addiction to borrowed money that helped create this mess in the first place.
So has prosperity been an illusion? Not entirely. We did have genuine gains over the decades: technology, healthcare, living standards. But a huge chunk of what we called “prosperity” in the last twenty years has turned out to be:
• Borrowed money,
• Inflated asset prices, and
• A political and financial story carefully crafted to avoid hard truths.
When half the country is $200 away from not paying the bills, when insolvencies climb back toward Great Recession levels, when food banks and school lunch programs are bulging at the seams, we are not talking about a “few vulnerable people.”
We are talking about a system-wide failure.
The real question is not whether some Canadians have lived well. Clearly, they have.
The question is whether the model itself was ever sustainable – or whether it was always an illusion that many people, by design, were never going to win.
You won’t hear that on the evening news.
But if you listen carefully in the grocery aisle, in the schoolyard, at the seniors’ centre, and in the trustee’s office, you’ll hear it everywhere.
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