Canada’s Debt-to-Income Ratio Increasing

Let the good times roll:

Canadian household debt as a share of income hit a record high in the second quarter, Statistics Canada data showed on Thursday in a report likely to reinforce concerns of overborrowing by consumers.

The ratio of household credit market debt to disposable income rose to 167.6 percent in the second quarter from 165.2 percent in the previous quarter. That means Canadians had C$1.68 ($1.27) of debt for every dollar of disposable income.

Household credit market debt, which includes consumer credit and mortgage and non-mortgage loans, rose 2 percent in the quarter, easily outpacing growth in disposable income of just 0.5 percent.

Years of low interest rates since the financial crisis have seen Canadians take on more debt, largely due to rising home prices.

Consumers borrowed a seasonally adjusted C$29.2 billion in the second quarter, an increase of C$3.5 billion from the previous quarter. Mortgages accounted for C$19.1 billion of that, up from C$18.4 billion, while other types of debt stood at C$10.1 billion, up from C$7.3 billion.

  • Liberal Progressive

    Only 167.6%?

    We can do better than that!

    Take out a new credit card or three, and use the card(s) to donate to Team Trudeau and the Liberal Party of Canada.

    After all Justin says our budgets will balance themselves out!

  • Oracle9

    … and the left, like spoiled children, still whine about the “disaster” left by the Harper years.

  • simus1

    The only rational explanation would seem to be that the banks and homeowners/ new homebuyers have every expectation that the government will waste massive amounts of taxpayers money to pull their chestnuts out of the fire when the economy finally goes for a shit. The really scary part is it could be a good bet – when it comes to kicking the ever growing deflation first/ hyperinflation later monster down the road some more years.