Canada’s Household Debt Servicing Costs Hit New Record

Canadian household debt rises again.

Canada’s already-serious household debt problem has worsened.

According to Statistics Canada, total household debt increased to $1.759 owed for every dollar made by Canadians.

That’s an increase from $1.754 in the Quarter 2 of 2019.

While the household debt level compared to income is slightly below the record of $1.785 that was hit in 2017, there’s some very bad news.

The cost of serving the debt, the percentage of income that goes to debt payments, has now hit 14.96%.

That’s the highest it’s ever been in Canadian history.

As reported by BNN Bloomberg, “RBC senior economist Robert Hogue notes the service ratio is at an all-time high, and that with mortgage debt also re-accelerating, he sees little scope to remove household debt from the list of top vulnerabilities for the economy.”

Total borrowing also surged in Quarter 3 of 2019, rising from $21.7 billion to $28.5 billion.

What makes this such a big concern is that the debt service ratio is rising at the same time the economy is weakening. If Canada falls into a recession, many people who are just barely keeping their heads above water will be drowning in debt, and that will cause a decline in household consumption that will slow the economy even further.

That could be mitigated by the government, with the combination of a huge investment in infrastructure, a large tax cut for working class and middle class Canadians, and a re-investment in our armed forces, which would create many jobs across the country.

Unfortunately, the Trudeau Liberal government instead appears to be focused on continuing their high-tax agenda, meaning the already-high cost of living will rise further, and make the burden of debt even worse.

Spencer Fernando

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Gerri Page

Trudeau doesn’t care because his pockets overflow with our money and most of it in offshore accounts no doubt.

Del

The Liberals are primarily focused on controlling climate and desperately trying to remain in power. The economy, foreign trade and relations, national security, safety from terrorist threats, control of the Border and illegal migrants and a dozen other important items are being pushed to the back burner if on the stove at all. A prime example is the intentional delay of voting on the Throne Speech. This should have been done but based on classic Liberal non-action, it might never happen. Trudeau is clearly terrified of a non-confidence vote. Could this Government actually be invalid?

Sue

I have been mentioning to members of my family in the last year, to try to get their financial house in order. Food and products are going to get much more expensive than they already have. The ride is going to be bumpy.

niclal

get angry …just dont take it …do something about it

NancyW

What has happened to Canadians? In the 1950’s and early 60’s Canadians were known around the world for being savers, and we always saved up to get what we needed too. We also were known for keeping a good supply of staples in our kitchens, more so than any other nation we were told. We also had the best education system in the world back then etc. . We seem to be going downwards at an alarming rate now, which is way worse and much more important to peoples lives in Canada, than this man made climate change, our governments… Read more »

niclal

Canadians like to let themselves be TAKEN with idiots like Trudeau stealing all …politicians get lazy …society is forgiving …justice is non existent …

old white guy

Nancy, it is called liberal socialism where everything is free until it isn’t.

Ralph Knapp

A high tax agenda would be acceptable if the excess was used to pay down the debt. However, Trudeau only cares about growing the debt as fast as he can.

old white guy

Never having been taught anything, especially economics, Canadians are of the opinion that they do not have to work and debt never has to repaid. The government has been their example and mentor. There is no way out of what has been created other than poverty.