Canadian household debt hits $1.8T as report warns of domestic risk
A new international banking report is sounding the alarm on Canada’s rising household debt levels as new figures from Equifax show that total Canadian consumer debt, including mortgages, has hit $1.821 trillion. Consumer credit cards are posed in North Andover, Mass., on March 5, 2012. THE CANADIAN PRESS/AP-Elise Amendola, File
March 12, 2018 - 8:41 AM
TORONTO - Canadians' collective household debt has climbed to $1.8 trillion as an international financial group sounds an early warning that the country's banking system is at risk from rising debt levels.
Equifax Canada says consumers now owe $1.821 trillion including mortgages as of the fourth-quarter of 2017, marking a six per cent increase from a year earlier.
Although nearly half of Canadians reduced their personal liabilities, roughly 37 per cent added to their debt to push the average amount up 3.3 per cent to $22,837 per person, not including mortgages.
The fresh numbers come as an international financial group owned by the world's central banks says Canada's credit-to-gross-domestic-product and debt-service ratios show early warning signs of potential risk to the banking system in the coming years.
The latest report by the Bank of International Settlements says Canada's credit-to-GDP gap and debt-service ratios have surpassed critical thresholds and are signalling red, pointing to vulnerabilities.
The group, however, cautions that these indicators should not be treated as a formal stress test, but as a first step in a broader analysis.
News from © The Canadian Press, 2018