Canada’s Household Debt Now Exceeds Our GDP

We also have the worst household debt in the G7.

What happens when a profligate government/central bank floods a country with borrowed money while simultaneously raising taxes and pursuing a radical ‘degrowth’ agenda?

Massive economic distortions, a lower standard of living, and unsustainable finances.

There’s no way around this. Without real productivity, without the generation of real wealth and value, any economic ‘growth’ must be illusory, based on either stealing growth from the future, or ‘growing’ due to population increases – which isn’t really growth at all.

This has been increasingly obvious for quite some time.

As Canada falls behind many peer nations, Canadians are starting to realize how truly screwed up our economy is. Our country is massively dependent on a housing market that is completely out of control, and this has become a huge economic trap.

Insane house prices are making it nearly impossible for a whole generation to afford a home, which has significant negative consequences for a country.

On top of that, the government is deliberately making it worse, as they are bringing in massive numbers of people into the country every year, with housing construction not even close to keeping up.

The problem is that the rest of the economy is being constrained by high taxes and the radical collectivist ‘eco-socialism’ of people like Steven Guilbeault. This drives up the cost of energy, has cost our country hundreds of billions of dollars of potential investment, and has led many people to depend even more on the value of their homes.

As if that wasn’t bad enough, a combination of absurd spending and the Bank of Canada enabling Trudeau’s fiscal irresponsibility has flooded our country with borrowed money. With that money not being directed towards productive purposes due to the aforementioned radical policies of the government, much of it has gone into the housing market, driving prices up even more.

Now, if the government was willing to cut taxes, eliminate the carbon tax, and pull back on their radical ‘net zero’ policies, it would be relatively manageable to bring down housing prices without doing serious economic damage. But that’s not the situation we are in.

And now, as the Canadian Mortgage and Housing Corporation is pointing out, Canada’s household debt is now larger than our entire GDP, and we have the worst household debt as a percentage of our economy of any G7 nation.

As you can see in the chart below, Canada’s already-high household debt to GDP ratio is only exceeded by Australia – not a G7 nation – and far outstrips countries like the United States.

“Household debt in Canada has been rising inexorably. At the time of the recession in 2008, it stood at about 80% of the size of the economy, in 2010 it rose to 95%, and by 2021 debt exceeded its size.

By contrast, household debt in the U.S. fell from 100% of GDP in 2008 to about 75% in 2021. While U.S. households reduced debt, Canadians increased theirs and this will likely continue to increase unless we address affordability in the housing market.”

Rising debt and a declining standard of living

This is an indictment of the economic policies of the Trudeau Liberals. But of course, they don’t care. They are imposing a radical agenda regardless of the damage. They borrow and spend like crazy. They increase our population massively without ever consulting Canadians about it. They hold back the most productive, ambitious, and creative Canadians, while bloating the public service to an absurd size. They impose tax after tax after tax, damaging our standard of living to ‘save the planet’ even as countries like China offset everything we do.

It’s not working. And it can’t work, because it’s designed not to work. A bunch of radical collectivists are in control of the country, and they see us not as individuals who should be empowered to achieve, but as pawns in their utopian schemes.

Spencer Fernando


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