Canadians’ collective household debt has climbed to $1.8 trillion as an international financial group sounds an early warning that Canada’s domestic banking system is at risk from rising debt levels.
Canadian consumers now owe $1.821 trillion including mortgages as of the fourth-quarter of 2017, marking a six per cent increase from a year earlier, says Equifax Canada.
Although nearly half of Canadians reduced their personal liabilities, roughly 37 per cent added to their debtload to push the average amount up 3.3 per cent to $22,837 per person, not including mortgages.
These fresh numbers come as an international financial group owned by the world’s central banks says Canada’s credit-to-gross-domestic-product and debt-service ratios show early warning signs of potential risk to the domestic banking system in the coming years.
The latest report by the Bank of International Settlements says Canada’s credit-to-GDP gap and debt-service ratios have surpassed critical thresholds and are signalling red, pointing to vulnerabilities.
The group, however, cautions that these indicators should not be treated as a formal stress test, but as a first step in a broader analysis.
The Canadian Press