Debt-to-household-income ratio rises in third quarter, household net worth
OTTAWA — Sky-high debt loads are one of the central bank governor’s top concerns, he said Thursday after data showed the amount Canadians owe relative to their income hit a new high in the third quarter.
Statistics Canada reported that household credit market debt as a proportion of household disposable income increased to 171.1 per cent, up from 170.1 per cent in the second quarter. That means there was $1.71 in credit market debt, which includes consumer credit and mortgage and non-mortgage loans, for every dollar of household disposable income.
Bank of Canada governor Stephen Poloz said in a speech in Toronto that high debt levels are one of the things that keeps him awake at night because they make the economy as a whole more sensitive to higher interest rates than in the past.
“These vulnerabilities are elevated, and are likely to remain so for a long time,” he said.