By M. Corey Goldman, National Post September 13, 2013 - The ratio of Canadian household debt to income rose to a record high 163.4% in the second quarter from 162.1% in the first quarter, Statistics Canada said on Friday. The increase followed two consecutive declines. Statscan revised the first quarter ratio up from an initial 161.8%. The news is unlikely to please the federal government and the Bank of Canada, which have both repeatedly warned Canadians against taking on too much debt – in particular cheap mortgages – at a time when interest rates are at near record lows.
The previous record was the 162.8% recorded in the third quarter of 2012. The 1.3 percentage point increase in the debt-to-income ratio in the second quarter of 2013 from the first is the highest such jump since the 1.5 percentage point advance recorded in the second quarter of 2012. Mortgage borrowing led the demand for credit in the second quarter, rising by $18 billion to a total of just over $1.1 trillion. National net worth in the second quarter rose 3.1% to $7.31 trillion from the first.
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