Canadian Household Debt Tops $2.2 Trillion, But Growth Drops To 1983 Levels

Canadian household debt reached a new high last month, but continues to see growth slow. Bank of Canada (BoC) numbers show the balance of outstanding credit reached a new record high in June. The record came with the slowest annual rate for June in decades, dragged down by a lack of consumer credit.

Canadians Owe Over $2.2 Trillion In Debt

Canadians owe a record amount of debt to institutional lenders as of last month. The outstanding balance of credit reached $2.21 trillion in June, up 0.59% from the month before. Compared to the same month last year, the balance is now 3.6% higher. Even with the record, the growth rate is very slow.

Canadian Household Debt Outstanding, Percent Change

The annual percent change of total debt held by Canadian households, in Canadian dollars.

Source: Bank of Canada, Better Dwelling.

The growth rate is rising from recent lows, but is very low for Canada. The 3.6% 12-month growth is an improvement from the 3.4% growth seen just a few months ago. For the month of June, it’s the lowest 12 month growth since 1983. Let’s break down these numbers to see where the slowdown is.

Over $1.57 Trillion Is Mortgage Debt

The vast majority of Canadian debt held by institutional lenders is mortgage debt. There was $1.575 trillion in outstanding debt in June, up 0.57% from the month before. The increase works out to 3.7% compared to the same month last year. On the upside, this is the third consecutive month the 12-month rate of growth has increased. On the downside, it’s still unusually slow for Canada.

Canadian Household Debt Outstanding In Dollars

Total debt held by Canadian households, in Canadian dollars.

Source: Bank of Canada, Better Dwelling.

Over $632 Billion Is Consumer Debt

The balance of debt held is consumer debt, which seeing growth fall. There was $632 billion in outstanding consumer credit in June, up 0.63% from the month before. Compared to the same month last year, this represents a 3.3% increase. This makes it the slowest 12 month growth since March 2016, and the slowest June since 2015.

Canadian Household Debt Change

Annual percent change in debt held by Canadian households.

Source: Bank of Canada, Better Dwelling.

Household credit is still growing, but at a very slow pace. Mortgage debt is seeing an improvement compared to recent months. However, it appears to be at the expense of consumer credit.

Like this post? Like us on Facebook for the next one in your feed.



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Tia Wolfe 5 years ago

    “Canada is a secure economy, with a small population, with prudent management – like Australia.”

    Sure, just like Australia. Let’s check in with them, shall we? Ah, their largest developer went bankrupt and prices haven’t even fallen that much.

    • Bluetheimpala 5 years ago

      Ralan is not their largest developer but one of the largest. There hasn’t been any reporting on the cause of the implosion. We’re in Canada, not Australia…I know, hard to believe right?
      There’s something about your recent arrival that makes me wonder why you are here and what your motives are. Don’t worry, I’ll keep an eye out for you. Tock.BD4L.

    • Chester Pape 5 years ago

      It’s easier to launder money from Asia major to Australia due to proximity. It’s only poorer immigrants and refugees that Australia and New Zealand have problems with, for example, the Breton Tarrant massacre. If those mosque worshippers were money launderers, he would have left them alone, but they were poorer migrants from a poor country.

      • Tim 5 years ago

        I’m opposite on the graph as I have no debt and have savings, the borrower is servant to the lender

  • Jin 5 years ago

    What’s interesting here is at 3.6% – 2.0% CPI, you’re left with 1.6% growth. GDP is projected to grow by 1.3% in 2019. 100% of growth is now drawn from credit growth. That’s no beuno.

    • Trader Jim 5 years ago

      Velocity multiplier too, each dollar in credit prints more than one dollar in GDP. There’s little to no productive growth these days. If you need credit to drive growth at the top of the market, how do you drive growth at the bottom?

      Even the growth we were seeing in GDP was related to inventory builds, otherwise the Canadian economy would have contracted 1.1% last year.

      We’re literally producing excess just to keep people employed.

      • David Brown 5 years ago

        “If you need credit to drive growth at the top of the market, how do you drive growth at the bottom?”

        With a credit fire hose, and you hike inflation at the inflation target review next year. There’s no other way than to drive inflation up, which is going to be dangerous to employment when debt levels are already this high.

    • johnm 5 years ago

      “100% of growth is now drawn from credit growth. ”

      Pretty much the norm for capitalism. Remember that money is just the debt of the issuer, so there is no money without debt.

      There are three magic ‘money trees’ with which to drive growth:
      1. Money ‘printed’ by the federal government (which results in government ‘debt’).
      2. Money created by private banks whenever they issue ‘loans’, which results in private debt (see Bank of England, Money Creation in the Modern Economy). In capitalism, bank credit is responsible for over 95% of a country’s money supply.
      3. Money ‘earned’ from exports, but globally this nets to zero since everyone can’t be a net exporter.

  • Trader Jim 5 years ago

    Still early to spot a trend, but it would be very weird to see mortgage and consumer credit diverge for a long time. They usually go hand in hand. If it does, you’re correct – people have enough to buy houses, just not furnish them.

  • Ryan 5 years ago

    We’re almost at the point where Canadians who have taken on excessive debt are essentially going to run out of credit options.

    Manulife reported 38% of Canadians are $200 or less a month away from insolvency. If 1/3 of Canadians can’t pay there bills (or a portion of them), we’re going to be in trouble quickly.

    Incomes are not growing at the same rate as debt – it’s going to be in interesting ride if the trend continues. Lots of opportunities if debt starts being a drag on the economy.

    • Average Man 5 years ago

      I am actually looking forward to the crash. Not because I’m some smart genius who’s in a position to capitalize. I’m not. I just want to see the suffering spread around a little more, watch some people get the smugness knocked out of them.

    • Chester Pape 5 years ago

      Recent uni and college graduates are begging to work for free just to gain networking and “job”experience. There’s even stories of volunteers buying Managers and Supervisors lunch and coffee to keep their “jobs”.

      • Smaug 5 years ago

        “Begging for free work”, while the unemployment rate is at its lowest level in over four decades? If you want to litter the comments section with the same nonsense over and over again, you’re going to have to provide some evidence. I mean actual numbers, not links to some crap article in the Huff Post that interviews 2 Millennials and then reaches a conclusion based on all two of them.

  • Stefanie 5 years ago

    What are the opportunities you would expect to see, if debt starts to be a drag on the economy?

    • Ryan 5 years ago

      Lots of options to short various stocks or investments in companies tied to mortgage and credit, as well as personal opportunities to snatch up real estate that is extremely overvalued at the moment.

      I know several families that are surviving just on credit – if they didn’t have access to credit to help pay the bills, they would need to quickly sell there homes. Once the credit dies up they would not be able to pay there current loans as the available balance would be $0.

      I agree with Average Man – would be nice to see some of the smugness disappear from our society. I’m tired of friends/family/co-workers who fund there lifestyle with credit, up your HELOC every month, and rub there “amazing life” in others faces who are making smart financial decisions. I know they won’t be having an amazing life when I’m retired at 55, and they are working in there 70’s – but would love to see something happen sooner to get the country back on track.

    • Chester Pape 5 years ago

      Doug Ford’s business and developer cohorts becoming richer.

      Can you believe that recent graduates of Toronto-area unis and colleges are competing to work for unpaid internships? Working for free?!

  • Chester Pape 5 years ago

    Don’t worry Baby Boomer home owners…The “Government of Canada (c) Her Majesty, (Queen Elizabeth II) will increase business and entrepreneur visas for easy access to laundering monies in Toronto and Vancouver’s real estate markets, increasing your house prices.

    Even Andrew Scheer and Max Bernier, alleged racist supporters, will increase money laundering visas while forcing Canadians to work for free for “work experience”.

  • Smaug 5 years ago

    We’ve got the lowest unemployment rate we’ve had since the current Labour Force Survey was invented in 1976. Anyone working for free is doing so voluntarily, and that’s their own damned fault. Stop making things up.

    • Trader Jim 5 years ago

      Same labour force survey that said Canada created 60,000 self-employed jobs one month, then lost 40,000 the next one? We’re either using crazy inaccurate methodology, or even “smoothed,” Canada is incredibly volatile these days.

    • Mack 5 years ago

      Smaug – That’s just not true. Not sure when you entered the workforce, but our supply of university educated new graduates is at multi-year highs with not enough spots to enter the workforce. In order to get the job they went to school for, they try to acquire experience via free work/un-paid internships”.

      Both my wife and I graduated in 2013 and both worked in 100% bonus/unpaid internships/volunteer positions call it whatever you want for 6+ months to gain experience on the resume. Entry-level positions require 1-2 years of experience (see the irony).

      Before I get bashed that I did everything wrong in life lol, I was trying to enter the investment banking world which there are roughly 50 spots a year in Toronto. I worked unpaid for 8 months and then landed my full-time IB Analyst role with a major global bank in Toronto.

      Yes the unemployment rate is the lowest it’s ever been, but I was working at a gym, TA’ing at a University and privately tutoring which putting in full-time “volunteer” hours with the goal of starting my career and making real $.

Comments are closed.