“One scenario is that interest rates rise, house prices drop, and more people
begin defaulting on their credit card debt and mortgage obligations. An equally
worrying – and perhaps more likely scenario – is that interest rates go up a
little, and more of people’s disposable income goes to repaying their debt,
leading to a significant reduction in consumer spending. Since personal spending
on consumer goods and services accounts for 58 per cent of the Canadian gross
domestic product, this decrease would provoke a ‘made in Canada’ recession.”