People in Canada owe $1.83 for every dollar of income they have

People in Canada owe $1.83 for every dollar of income they have

Canada collectively has nearly $2 trillion in mortgage debt and $722 billion worth of other debt

Canada families now owe $1.83 for every dollar of disposable income they have, Statistics Canada data shows.

Canada families now owe $1.83 for every dollar of disposable income they have, Statistics Canada data shows.

Stats Canada says that Canadian households owing relative to their disposable income increased in the third quarter of 2022

They said household credit market debt rose by 183.3 per cent on a seasonally in the third quarter, compared with 182.6 per cent in the second quarter.

Basically, Statistics Canada says there was $1.83 in debt per every dollar of disposable income that households had in the July-to-September period.

Income gained 0.8 per cent in the quarter, while household credit market debt rose 1.2 per cent.

“Both mortgage and non-mortgage loans grew despite aggressive rate hikes throughout the quarter,” Bank of Montreal economist Shelley Kaushik noted, with mortgage debt hitting $2.07 trillion and other forms of debt hitting $722.6 billion.

The $2.8-trillion of debt forced the household debt service ratio — the amount of money that households spend on servicing debt, as a percentage of their income — rose to 13.97 per cent in the third quarter.

Canada families now owe $1.83 for every dollar of disposable income they have, Statistics Canada data shows.

Canada families now owe $1.83 for every dollar of disposable income they have, Statistics Canada data shows.

Wealth takes a hit

The amount that Canadians owe leaped higher, and the value of their assets decreased, causing national net worth per capita to fall 3.8 per cent to $438,815.

“This is the first time since the global financial crisis, when wealth fell 8.5 per cent peak-to-trough, that Canada has seen back-to-back declines in household wealth,” TD Bank economist Ksenia Bushmeneva said of the data.

“As Canadians dedicate more of their income to debt servicing, hard choices will be made with respect to discretionary spending, which we expect to be very modest next year.”

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