Canadian Household Debt Ratio Rises As Income Growth Weakens

The combination of a weakening economy and rising interest rates put Canada in a very dangerous position.

Canada’s household debt ratio – often measured as the highest on earth – has risen once again.

This time, it’s rising because of weakening income growth, rather than surging debt levels.

The household debt ratio ‘unexpectedly’ increased from 177.4 in Q2, to 177.5 in Q3.

According to economic analyst Priscilla Thiagamoorthy, “but unlike in past quarters, the culprit is a weaker income backdrop rather than higher debt loads. While the decades-long consumer debt mania is finally easing, income growth now remains a concern, keeping household credit burdens a key headwind to the Canadian economy.”

The media often fails to mention Canada’s sky-high household debt ratio, despite how vulnerable it makes our economy. Any large interest rate hike, or decline in income, or combination of the two, could push Canada towards a recession or even an economic crisis.

And that risk is being made far worse by the policies of the Trudeau government. By making life more expensive, they make it tougher for people to spend money in the economy and manage their debts, which causes economic weakness and makes high debt levels even more burdensome.

Spencer Fernando

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shawn harrisBrian DouganJohn WCatanddogDel Recent comment authors
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Wasting after tax money on the Trudeau / Horgan / barbie Carbon Tax does absolutely nothing for Canadians except reducing our purchasing abilities. How are we supposed to buy an efficient vehicle or insulate our homes or buy energy efficient appliances when that money is taken by the Government? If China starts crapping all over Canada we will be forced to buy expensive Made in Canada stuff, if it can be found, that causes pollution that the Liberals hate. I have already modified my budget to account for increased Trudeau / Horgan Carbon Taxes by limiting my donating to one… Read more »

Catanddog
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Catanddog

Not just Trudeau. It’s provincial policies as well. Vancouver property tax for example going up, again this year, by 5%. Etc.

John W
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John W

The borrowing and spending binge by Canadian households, businesses and governments (all levels) continues unabated.

At the end of September, 2018 the total debt outstanding in Canada (bottom line of the Statistics Canada credit market summary data table) was $7.953 trillion. At the end of September, 2017 the total debt outstanding was $7.577 trillion. In the 1 year period from the end of September, 2017 to the end of September, 2018 it increased by $376 billion. This is an increase of 4.9%.

https://owecanada.blogspot.com/2018/12/canadian-total-household-business-and.html

Brian Dougan
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Let’s look on the bright side. When we’re all riding bicycles; we won’t need to buy gas; or vehicle insurance. Wait a minute–We won’t have jobs. At least Uncle Trudope will take care of us. If we are frugal; our guaranteed annual income will support us. If we don’t have kids. If we’re not married. If we like living off the dole. If we like living in basements. Or–We can all join “Minister” Freeland on Trudope’s floor. Hugs and hot chocolate everyone! Thanks Trudope!! What a swell guy. Putz.

shawn harris
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shawn harris

Since the last election of 2015, Trudeau has been deceitfully saying that he wants to give the economy a kickstart and to help the middle class and those who want or are trying to join it, a chance to join it. Yet he has done just the opposite and has failed all Canadians, regardless of income status. His policies have lead to the middle class income workers paying more in taxes, not less and 82% of all Canadians are paying more in taxes not less. Trudeau has doubled down on damaging our economy by deliberately labelling small business owners as… Read more »