Canadians have $2 trillion in mortgage debt and $722 billion worth of other types of debt
Statistics Canada says the amount Canadian households owe relative to their income rose in the third quarter.
The agency says household credit market debt as a proportion of household disposable income increased to 183.3 per cent on a seasonally adjusted basis in the third quarter, compared with 182.6 per cent in the second quarter.
In other words, Statistics Canada says there was $1.83 in credit market debt for every dollar of disposable income that households had in the July-to-September period.
Income gained 0.8 per cent in the quarter, while household credit market debt rose 1.2 per cent.
Both mortgage and non-mortgage loans grew despite aggressive rate hikes throughout the quarter, Bank of Montreal economist Shelley Kaushik noted, with mortgage debt hitting $2.07 trillion and other forms of debt hitting $722.6 billion.
That $2.8-trillion pile of debt caused the household debt service ratio — the amount of money that households spend on servicing debt, as a percentage of their income — rose to 13.97 per cent in the third quarter, compared with 13.46 per cent in the second quarter.
Wealth takes a hit
While the amount that Canadians owe ticked higher, the value of their assets declined, causing national net worth per capita to fall 3.8 per cent to $438,815.
This is the first time since the global financial crisis, when wealth fell 8.5 per cent peak-to-trough, that Canada has seen back-to-back declines in household wealth, TD Bank economist Ksenia Bushmeneva said of the data.
As Canadians dedicate more of their income to debt servicing, hard choices will be made with respect to discretionary spending, which we expect to be very modest next year.
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CBC News with files from The Canadian Press