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Canadian household debt, which already exceeds the size of the country’s economy and tops the G7 countries, is seeing larger increases as interest rates rise, according to a report published by the Canadian Mortgage and Housing Corporation.
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The May 23 report said that concerns about the fallout from high household debt, about three-quarters of which come from mortgages, are most pressing for those with lower incomes because they also tend to be more indebted. So not only are they counting on getting jobs to service the debt, but they now “face real pressure” from rising housing costs.
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“We see early warning signs that more and more consumers are experiencing financial hardship,” the report warned, adding that it would soon publish a more detailed report on these problems.
We see early warning signs that more and more consumers are experiencing financial hardship
CMHC report
“The debt of households in Canada is rising relentlessly…. Unfortunately, (this) makes the economy vulnerable to any global economic crisis.”
The housing authority said there are concerns that Canadians’ high debt levels could worsen in the long term, depending on the path of interest rates.
