Canadian households now owe $1.83 for every dollar of disposable income they have | CBC News

Statistics Canada says the amount Canadian households owe relative to their income rose in the third quarter.

The agency says household credit market debt as a proportion of household disposable income increased to 183.3 per cent on a seasonally adjusted basis in the third quarter compared with 182.6 per cent in the second quarter.

In other words, Statistics Canada says there was $1.83 in credit market debt for every dollar of household disposable income in the third quarter of 2022.

The increase came as households’ disposable income gained 0.8 per cent in the quarter, while household credit market debt rose 1.2 per cent.

The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose to 13.97 per cent in the third quarter compared with 13.46 per cent in the second quarter.

The total amount of household credit market debt, which included consumer credit, and mortgage and non-mortgage loans, grew 1.2 per cent to reach nearly $2.8 trillion in the third quarter including $2.07 trillion in mortgage debt while non-mortgage loans totalled $722.6 billion.

Wealth takes a hit

While the amount that Canadians owe ticked higher, the value of their assets declined, causing national net worth per capita to fall 3.8 per cent to $438,815.

“This is the first time since the global financial crisis, when wealth fell 8.5 per cent peak-to-trough, that Canada has seen back-to-back declines in household wealth,” TD Bank economist Ksenia Bushmeneva said of the data.

“As Canadians dedicate more of their income to debt servicing, hard choices will be made with respect to discretionary spending, which we expect to be very modest next year.”