OTTAWA—The amount Canadians owe compared with how much they earn hit another record high last year.
Statistics Canada said the amount of household credit market debt rose to 167.3 percent of adjusted household disposable income in the fourth quarter, up from 166.8 percent in the third quarter.
That means there was $1.67 in credit market debt for every dollar of adjusted household disposable income.
“After slowing to a stable year-over-year pace by late-2013, growth in this debt ratio has since accelerated again alongside torrid gains in the Vancouver and Toronto housing markets,” said Robert Kavcic, BMO Capital Markets senior economist.
Fuelled by mortgages and low interest rates, household debt has been climbing steadily in recent years. Policymakers have raised concerns about household debt and see it as a key risk to the economy.
While interest rates have been low for years, making borrowing money cheap for Canadians, some have expressed concerns about what could happen when rates rise or if there is a shock to the economy that results in a large number of job losses.
The increase in the key debt ratio came as income rose by 1.1 percent, while household credit market debt gained 1.2 percent.
