Statistics Canada says Canadians owe $1.69 in credit market debt for every dollar of household disposable income. Photo courtesy CBC.
The amount of money leaving Canadians’ bank accounts to pay off debt climbed last quarter compared to income going in, according to Statistics Canada.
The agency says Friday the amount of credit market debt in proportion to household disposable income increased to 169.1 per cent in the second quarter.
That means Canadians owe $1.69 for every dollar of household disposable income.
Statistics Canada says debt ratio climbed from 168.3 per cent in the first quarter but the result is down from the same time last year when the proportion was 169.7 per cent.
On an unadjusted basis, household credit debt from credit cards, mortgages and non-mortgage loans totalled $2.16 trillion.
On a seasonally adjusted basis, households borrowed $19.6 billion in the quarter, down from the previous quarter’s figure of $22.2 billion.
The decrease came as demand for consumer credit increased, but was more than offset by a decline in both mortgage and non-mortgage loans with the housing market slowing with tighter mortgage rules and rates.
The Credit Counselling Society (CCS) said Friday consumer tension is not eased because of a trade spat between Canada and the United States that could spell a drawn-out trade war.
“We are hearing from Canadians who are carrying an average debt load of $30,000 – people are feeling the stress of today’s debt and wondering how they will cope with higher rates in the future and the possibility of higher unemployment as a result of a drawn-out trade war,” CCS CEO Scott Hannah said in a release.
A CCS annual survey reported 40 per cent of employed Canadians say they are overwhelmed by debt, up five per cent from last year.
Just over a third of Canadians say their debt load increased over the previous year.
“Unfortunately, we’ve been seeing these financial trends for a number of years now, and I can’t stress enough the importance of tracking your spending, establishing a budget, creating an emergency fund and finding ways to pay down your debt,” Hannah said.
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