Canadian households now carry nearly $3 trillion in debt — surpassing the country's entire economic output — according to alarming new data from Statistics Canada. Blacklock's Reporter says at a Commons industry committee meeting, Jennifer Withington, assistant chief statistician at StatsCan, warned that rising living costs are exacerbating financial strain, especially for vulnerable households."Household debt had reached nearly $3 trillion by August 2024, translating to $1.76 owed for every dollar of disposable income," said Withington. Although debt levels per dollar of income have decreased slightly from previous years, debt levels remain almost double what they were a generation ago.Credit card debt, which surged to $104 billion last year, accounts for about one-tenth of all household debt. Rising fees compound these obligations, with Canadians paying $6.8 billion in credit fees this summer alone — a 35% increase from the previous year.“With higher costs of goods and services, vulnerable households are likely to face even greater challenges,” testified Withington. She noted that credit card debt is among the most common forms of borrowing, alongside home equity lines of credit, which represent nearly half of all lines of credit.The Budget Office’s 2017 Household Indebtedness And Financial Vulnerability report found that 65% of Canadian household debt is tied to mortgages, with consumer credit and other non-mortgage loans making up the rest. This report had cautioned that household debt-servicing capacity was increasingly stretched, and future trends were expected to push financial vulnerability to unprecedented levels.Low interest rates and soaring housing prices in recent years have fueled the rapid expansion of home equity lines of credit, now averaging $70,000 per household, according to a 2019 Financial Consumer Agency report. "The sustained increase in residential real estate prices since the early 2000s has enabled homeowners to leverage their property value for secured lines of credit," wrote the Agency.With household debt continuing to grow, StatsCan's Withington cautioned that sustained economic pressure will likely impact Canadians' financial stability.
