Canada’s household debt is already the highest in the world, and the rise of the debt-to-income ratio poses a significant risk to our economy.
As many people continue to point out, an economy based upon massive levels of debt is an economy at serious risk of recession or worse.
That’s the situation facing Canada today, as household debt continues to grow relative to income.
The household debt-to-income ratio has reached 171.1% in Q3, which is up from 170.1% in Q2.
According to a recent report, the total level of household debt in Canada was up 1.4% in Q3, reaching a total of $2.11 trillion. Consumer debt went up 1.2%, reaching $620.7 billion.
This rise in household debt is masking a serious problem with our economy. Wages are not keeping up with the cost of living, despite the best efforts of the elites to distract from this fact. Consider that it was once possible for the average family to afford two children, two cars, a house, travel, and more – all on one income, and without going massively into debt.
Now, even when a family has two parents working, it’s still often not enough.
This means that we have been lied to about how the economy is really functioning, and the real inflation rate has likely been manipulated for years.
As a result, Canadians are going further into debt in an attempt to make ends meet, and inflated housing prices are creating a significant level of “wealth” that could rapidly vanish.
Remember, substituting debt for income still means Canadians are getting poorer.
All of this makes our economy extremely vulnerable, and the continued growth of the government bureaucracy and tax increases isn’t helping. Meanwhile, the government implements anti-worker policies, with actions that help the wealthy elites while reducing the leverage and wages of Canadian workers. This simply feeds into the debt problem and makes things worse.
Unless actions are taken to put more money in the hands of taxpayers and support Canadian workers, the debt problem will only grow, and our economy will face a reckoning.