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Canada’s Household Debt Levels Continue to Rise

When Canada’s household debt numbers got revised to 163% earlier this fall, it was hard to believe that they could climb even higher. But, with Statistics Canada releasing their latest stats earlier this week, it’s evident that’s exactly what happened. And that now is the time for Canadians to get their debt under control. Something that will be very difficult to do as we only get further into the holiday shopping season.

Even with the changes to mortgage rules, Statistics Canada stated that credit market debt, which includes mortgages, rose to 164.6 per cent of disposable income, meaning that people are spending more than $164 for every $100 that they earn. That’s up almost an entire percentage point from the previous quarter.

Consumer credit market debt, which studies things such as credit cards, inched up only 1.8 per cent. While that may seem encouraging, the last time Stats Can reported on consumer debt, levels had dropped slightly. The most recent stats certainly show that the holiday crunch is on in Canada.

And all of this while disposable income only climbed 0.8 per cent, certainly not keeping up with the amount Canadians are spending.

Even though we shouldn’t be comparing our debt levels with those that were seen in the U.S. at the height of the crisis, Stats Can data spells trouble. Especially if interest rates are to rise.

If the rate were to be lifted to even 4.25 per cent from the 1 per cent where it stands today, 20 per cent of Canadian households would need to use more than 40 per cent of their income just to cover that debt. That’s up significantly ¬†from today’s 12 per cent. It’s thought that this rate is where it may stand by the middle of 2015; and that’s just not simply enough time for many Canadians to get their debt under control.

In other dismal news, Stats Can also reported that the amount of home equity held by Canadians has also dropped to 69 per cent; down from 69.3 per cent from the quarter prior.

Was there any good news? Some. Household net worth also reported that household net worth rose to $7.03 trillion from $6.92 trillion.


  1. Vans says:

    Perhaps we need to initiate a study on why Canadians are borrowing so much. What are Canadians buying with all this extra credit.
    Does anyone want to know why there is so much debt?
    It seems to be sensational reporting that there is so much debt,
    But let’s report on what we are purchasing with all this debt.. Is it essentials or luxuries?
    Perhaps Statistics Canada has the answer.

    • Bryan J. says:

      A lot of this debt that is referred to is a mix of consumer debt but mostly mortgage debt.
      This is what has been fueling the rising values and home prices and people have taken on
      increasingly larger mortgages and larger amounts of their income are being utilized to make
      their mortgage payments.

      While not specifically BAD debt, its also not necessarily GOOD debt, as more income is
      sucked out of the economy to pay off mortgages it means less available for spending and
      investment as a whole.

      This isn’t debt being accumulated for research, productivity improvements and other
      economically beneficial debt as this is consumer/residential as opposed to commercial

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