The level of debt that Canadians owe in relation to their income rose in the second quarter, as the increase in debt outpaced income growth, new data from Statistics Canada suggests.
The proportion of household credit market debt relative to disposable income increased to 174.9 percent on a seasonally adjusted basis, marking an increase of 1.1 percent, StatCan reported this week.
“In other words, there was $1.75 in credit market debt for every dollar of household disposable income in the second quarter, considerably lower than the record $1.86 in the fourth quarter of 2021,” the agency said.
The household debt service ratio, which is defined as the total required payments of principal and interest on credit market debt relative to disposable income, grew to 14.41 percent during the quarter, up from 14.37 percent.
The findings indicated that household credit market borrowing slowed to a seasonally adjusted $31.6 billion during the quarter, a decline from $34.5 billion in the first three months of 2025.
The total amount of household credit market debt, seasonally adjusted and including consumer credit, mortgage, and non-mortgage loans, saw a 1 percent increase, exceeding $3.1 trillion in the second quarter, with mortgages making up nearly 75 percent of the total.
The seasonally adjusted household saving rate decreased to 5 percent during the second quarter of 2025, as the 1.2 percent increase in household spending surpassed the modest growth in disposable income of 0.3 percent, StatCan noted.
Households’ net purchases of mutual fund shares amounted to $28.5 billion in the second quarter in contrast to a total inflow of $118.3 billion recorded in the fourth quarter of 2024 and the first quarter of 2025, the report said. Households also contributed $10.7 billion in Canadian currency and deposits in the second quarter, marking the slowest accumulation since the first quarter of 2021.
Information provided in a separate report by Canada’s Parliamentary Budget Officer said the wealthiest 1 percent of families in Canada control approximately 24 percent of the nation’s overall net wealth, with each family having a minimum of $7.4 million in net assets.
The top 10 percent hold roughly 53 percent of the overall net wealth, while the top 20 percent account for 69 percent of the total net wealth.
The middle 40 percent possess 27.6 percent of the net wealth, while the bottom 40 percent hold approximately 3.3 percent of the net wealth.
The report mentioned a slight increase in wealth concentration from 2016 to 2019, followed by a reversal of this trend from 2019 to 2023. It also noted uncertainties in the data could mean the concentration of wealth among high-net-worth families in 2023 is either on par with or slightly lower than in 2019.
The Canadian Press contributed to this report.
