This could be the year Canadians begin to save more and spend less, according to a report released today by Scotia Economics.

Entitled “Spend or Save — Which way will the savings pendulum swing in 2006,” the report suggests that, while most consumers remain confident, many Canadians believe the pendulum will begin to swing to the saving side of the arc. Concerns about expanding disparities in growth prospects among Canada’s regions, rising geopolitical tensions globally and an increasing number of baby boomers retiring are pushing the saving trend.

Across the country, though more in the West, consumers are keeping shopkeepers happy. 2005 was another year during which Canadians spent more and saved less.

“Canadians are betting that the good times will continue to roll. And they may be right, particularly if they work, reside or primarily invest in the high-growth, resource-rich western provinces,” says Aron Gampel, deputy chief economist at Scotia Economics. “The significant ratcheting up in energy-related investments will keep this region, as well as Newfoundland & Labrador, in the relative fast lane of growth.

“The major population centres in Ontario and Quebec will continue to grapple with the multi-year restructuring of their large manufacturing sectors that are at the epicentre of the global gravitational shift in production to the more labour-cost competitive countries overseas,” Gampel added.

Gampel concludes that for many Canadians, a simple plan could involve asset diversification, paying down debt, especially non-tax deductible liabilities, and directing more funds into savings plans such as RRSPs.