News Releases

TORONTO, ONTARIO--(Marketwire - Dec. 19, 2011) - Despite a challenging economic environment, one third of Canadians in the workforce expect to receive a year-end bonus, according to a new BMO holiday survey.

Of those who believe that they are likely to receive year-end compensation, half anticipate it will be the same as last year, 22 per cent believe it will be less, and 28 per cent think it will likely be more than last year. The survey, conducted by Leger Marketing, also found that, nationally one third of those who expect a smaller bonus believe it will be up to 10 per cent lower than last year. By contrast, four in ten of those who expect a larger bonus believe it will range from 1 per cent to 10 per cent higher than last year.

Size of Bonus Compared to 2010 (Regional)

	National		ATL		QC		ON		MB/SK		AB		BC
Same	51	%	40	%	50	%	50	%	68	%	55	%	41	%
More	28	%	23	%	28	%	25	%	26	%	40	%	29	%
Less	22	%	37	%	23	%	25	%	6	%	5	%	30	%

"There is little doubt that global economic uncertainty has proved to be challenging for many Canadian businesses this year. In this environment, business owners have had to achieve a balance between recognizing the achievements of their employees and rewarding their contributions, with the need to maintain efficient business operations," said Cathy Pin, Vice-President, BMO Commercial Banking. "One thing we know, from talking with entrepreneurs, is the importance they place on their employees and the role they play in their companies' success."

The BMO Survey also asked working Canadians (who are eligible to receive a holiday bonus this year) what they would do with the money. More than half (53 per cent), indicated that they would use the money to pay down household debt, including a mortgage, credit cards, auto loan, or personal line of credit. Other popular choices included paying for holiday spending (23 per cent), rewarding themselves with a new consumer purchase (17 per cent), or taking a vacation (15 per cent).

Uses for Holiday Bonuses (Regional)

	National		ATL		QC		ON		MB/SK		AB		BC
Pay down household debt	53	%	47	%	45	%	57	%	43	%	66	%	56	%
Pay for Holiday spending	23	%	32	%	19	%	27	%	26	%	16	%	21	%
Reward yourself with a new consumer purchase	17	%	19	%	20	%	14	%	16	%	19	%	14	%
Take a vacation	15	%	21	%	19	%	13	%	17	%	15	%	12	%

For Canadians looking to pay down debt heading into 2012, BMO offers the following tips:

Don't overspend - Spend less than you make. Develop a budget that establishes how household expenses will be paid and how spending will be managed. Take advantage of free online tools, such as BMO MoneyLogic™, to help stay on top of everyday household spending and saving.

Curb credit card debt - Pay down credit cards, beginning with those that carry the highest rate, and consider using a low rate card for purchases. For instance, the BMO Preferred Rate MasterCard offers a low rate of 11.9 per cent for an annual fee of $20 per year.

Invest to save - Set up a Tax Free Savings Account (TFSA) or high interest savings account to set aside extra cash in case of an emergency. Also consider using Exchange Traded Funds to reduce management expense fees.

Become mortgage free faster - Cutting your amortization from 30 to 25 years and increasing monthly payments on mortgages can help you pay down your mortgage faster while saving you thousands of dollars in interest costs. For instance, BMO offers a low five year-fixed rate mortgage with a maximum 25-year amortization at 3.49 per cent.

Have a Back-up Plan - Plan ahead and develop a fall back plan in case you are unable to meet your financial obligations due to unexpected circumstances, such as loss of work, or damage to personal property, including your home or vehicle.

For more information on BMO MoneyLogic™, please visit www.bmo.com/moneylogic and for more tips on smart spending, borrowing and saving, please visit www.bmo.com/smartsteps.

BMO's Commercial Banking Holiday Survey was completed online from December 5-8, 2011, using Leger Marketing's online panel, LegerWeb, with a sample of 1542 Canadians. A probability sample of the same size would yield a margin of error of +/-2.5 per cent 19 times out of 20. * Stats in this release are based on respondents who are eligible for year-end bonus/compensation.