The situation will vary from household to household, but the total amount of money saved spiked during the pandemic with Canadians* socking away $211.9 billion last year compared to just $18.1 billion in 2019.

This works out to an average of $5,574 per Canadian in 2020 versus $479 the year before.

The average savings rate jumped from 1.3 per cent of disposable income in 2019 to 14.9 per cent in 2020.

The rise in savings is the result of the combined impact of reduced spending and income gains from government transfers.

As a result, while not all households have “extra” money in the bank as a result of the pandemic, many do. This raises a key question: what will Canadians do with this money? Will they use it to pay down debt, to help pay for a new home, to buy consumer goods and services, to travel or to invest?

In its latest Monetary Policy Report, the Bank of Canada says it “continues to assume that households will choose not to spend these savings on goods and services but instead use them to pay down debt, buy homes or invest. In addition, a heightened demand for precautionary savings is assumed to persist for some time. The savings rate is therefore expected to decline gradually and stay somewhat above its pre-pandemic level until the end of [2023].”

The Bank of Canada could, of course, be wrong and Canadians might decide to flow a large portion of this cash into consumer spending.

We will just have to wait and see.

*Provincial data for 2019 and 2020 are not available at this time.

Answer to the previous trivia question: Known as the “The World’s Largest Dinosaur,” the Tyrannosaurus Rex statue in Drumheller, Alberta is 25 metres tall.

Today’s trivia question: According to the Bank of Canada, during what year did the interest paid on a standard savings account at a chartered bank peak at 19 per cent?