CONCERNING: Canadian Household Debt Reaches Record High

The household debt-to-income ratio reached the highest level ever recorded, as concern rises about Canada’s economic vulnerability.

According to Statistics Canada, the ratio of debt to income has now reached 167.8%, meaning Canadians on average have $1.68 of debt for each dollar of income.

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  • deplorabledave

    Thats why taxes on small business must be increased.

  • BillyHW

    Canadian budgets balance themselves, mofo!

    • terrence22

      after all, it is 2015

  • Tooth&Claw

    When you’re taxed at an effective rate of close to 50% and are only earning relatively the same wage as you did in the 1970’s in terms of purchasing power…what was expected?

    • Lightstream

      You took the words right out of my mouth. I think we’re taxed at 52%. Someone correct me if I’m wrong.

      • JPfromtheeast

        The average household total taxation average in Canada is now 43%.

  • Alain

    While this is an important concern, a much greater one is national debt caused by the government along with provincial debt by each province. Yet this is not addressed. A fish rots from the head down.

  • DMB
  • Raymond Hietapakka

    ..in Ontario and Nova Scotia, you now pay a combined tax burden of 53%….you’re now officially working for the government..

    • Alain

      Unless it has recently changed in Quebec it is even more.

      • Raymond Hietapakka

        …tabernak…

  • canminuteman

    Does anyone know how this ratio of debt to income is calculated? To me it seems nonsensical. If I have a 200,000 dollar mortgage payable over 30 years and I make 100,000 a year and have no problem paying my mortgage, I have a debt to income ratio if 2, which is worse than the $1.68 they are talking about. If I owe 1.68 right now and only have 1$, I’d be bankrupt. Does “income” in this this formula mean next weeks paycheck and “debt” mean next months credit card bill? Or does it mean your next twenty years income and your 20 year mortgage? Unless they tell you exactly how they calculate this number it’s meaningless.

    • Maurice Miner

      True dat! The only possible mechanism is income versus debt versus time.

      For instance, consider a monthly time-span. Income (gross or net???) is say $4,000 net per month.

      Your debt (cumulative. total or minimum monthly???) is say $2,000 for mortgage, and say $1,000 to pay off auto loans, student loans and credit cards. The remaining $1,000 is for basic necessities.

      Is a future payment sometime this year (property tax, medical insurance, utilities (power/heating), car registration and insurance fees) counted as a “debt”?

      As you have so adroitly pointed out, it is meaningless in the absence of definitions of “income” and “debt” to arrive at a precise ratio.

    • Literally Hitler

      Agreed, this stat always confuses me. According to the Reuters story more than half of that debt is mortgages. As an overall trend it is not very useful.

      There is a big difference between someone with high net worth who has a mortgage versus another with few to no assets and a lot of unsecured debt.

      I want to know if there is a trend in these segments and if we are approaching a time of higher defaults and bankruptcies.

  • terrence22

    This reminds me of a book written in 1954 with the title: “How To Lie with Statistics” by Darrel Huff; it was re-issued in 1993.

    I bought a well used copy of it while I was taking a statistics course at the U of Calgary in the mid 1970’s, and I still have it. You can still buy it on Amazon. It is well worth a read, and he manages to make it funny.

    Unfortunately, but NOT UNEXPECTEDLY, it still says a lot about numbers and stats, and their often meaningless “uses”.