Canadian Household Debt Surpasses $3 Trillion For The First Time Ever

Canadian household debt is back, but a little different this time. Statistics Canada (Stat Can) data shows households owed more than $3 trillion in September, a new record high. Both mortgage and consumer credit growth accelerated, the latter at a faster pace. An unusual trend that indicates households are gobbling up credit, but less of it’s for housing these days. 

Canadians Household Debt Surpasses $3 Trillion For The First-Time Ever

Canadian household debt outstanding at institutional lenders, in trillions of dollars.

Source: Statistics Canada; Better Dwelling. 

Canadian household debt is once again accelerating to new highs. Household debt grew 0.4% (+$11.5 billion) to $3.0 trillion in September. Annual growth climbed to 3.6% (+$104.5 billion), with both the monthly and annual rate showing acceleration similar to the Spring, which is a little odd going into what’s traditionally a slow season. 

Canadian Mortgage Borrowing Accelerates, But Remains A Smaller Share of Borrowing

Mortgages still represent the majority of debt, but it was underrepresented when it came to monthly growth. Outstanding mortgage credit climbed 0.3% (+$7.4 billion) to $2.2 trillion in September. This helped to push annual growth to 3.5% (+$75.2 billion), accelerating but it remains muted. Total residential mortgage credit represents 73% of household debt, but just 64% of the month’s growth.

Canadian Consumer Debt Continues To Outpace Mortgage Borrowing

Annual growth of consumer and mortgage debt owed by Canadian households, in percentage points.

Source: Statistics Canada; Better Dwelling. 

Non-mortgage credit gained more ground as households racked up more consumer debt, like credit card balances. The segment advanced 0.5% (+$4.2 billion) to $776.0 billion in September, up 4.0% (+$30.2 billion) from last year. An uptick to insolvencies and rising unemployment indicates this is likely more people borrowing to make ends meet, than financing a Skidoo. 

The return of debt accumulation is expected as the Bank of Canada (BoC) kicks off the easing cycle. This data proceeds the central bank’s double rate cuts in October, which helped to motivate a substantial uptick in home buying. Consequently, borrowing is expected to rise at a faster rate. Though it’s worth remembering that rate cuts back in the Spring motivate an uptick in borrowing, but it reverted just a few months later once the FOMO died down.  

7 Comments

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  • Reply
    Jc 3 days ago

    What’s the household debt per household? Seems like it’s nothing to worry about if you account for population increase.

    • Reply
      Jay 2 days ago

      It’s uneven distribution, people with massive mortgages will be in depression if their job doesn’t give them huge pay upgrades in the next five years.

  • Reply
    Matt 2 days ago

    15.6 million households. So just less then 50,000 consumers per household as an average

    • Reply
      Ethan Wu 2 days ago

      Except 20% of households represent more than 80% of total borrowing, so averaging down like that makes no sense. In finance the total is relevant for comparing to GDP—if it’s growing faster, as it is, it means a compounding drag on the economy.

  • Reply
    George 2 days ago

    Debt, paying the essentials like food, and the general increase in cost of living.

  • Reply
    Peter Gobet 2 days ago

    Sooner or later you have to pay the piper, I think very challenging times
    Are coming.
    Good luck to the People who have gotten used to quick easy money.
    Money must have value , and it’s not easy to pay back

  • Reply
    SW 1 day ago

    In my opinion. Print more money and give thousands per person to get caught up. The cost of living should be 50% less than income. Life should be worth living and not just surviving and suffering. I was never asked if I wanted to live at all, why do I have to be suffering? Why do I never get to own a house or not be able to experience life at all. I work full time or more and can never do anything but work, sleep and eat once daily.

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