Canadians Push Past $2 Trillion In Debt To Set A New Record…Again

Canadians Push Past $2 Trillion In Debt To Set A New Record...Again

All of those government warnings about Canadian debt apparently had zero impact. The latest Bank of Canada (BoC) tally on consumer debt shows Canadians didn’t slow down the rate they accumulated debt, they actually started acquiring it faster. Both residential mortgage and consumer debt are both at all time highs.

Canadians Now Owe $2.025 Trillion

Canadians pushed household credit to new highs. There was a total of $2.025 trillion in outstanding debt, a 5.5% increase from last year. That’s a $104.7 billion increase in twelve months, and a $20 billion dollar increase during the first four months of 2017. The annualized one-month rate of change was 6.8%. To put it bluntly, Canadian debt accumulation accelerated in April.

Source: Bank of Canada.

Canadian Mortgage Debt Is Now $1.454 Trillion

Residential mortgages accounted for the majority of debt increases – shocker, I know. Total residential debt now stands at $1.454 trillion, a 6.1% increase from last year. The annualized one-month rate of change stood at 7.1%, so they’re definitely pumping the gas on mortgages. Mortgage debt accounts for 71.8% of all consumer debt these days.

Canadian household debt levels have only been reduced in 10 out the past 340 months. Source: Bank of Canada.

Canadian Consumer Credit Is Now $571 Billion

Canadians are accumulating consumer debt at a fairly rapid rate. Just so we’re clear, this isn’t debt that can be argued is for the acquisition of assets. This is mostly just plain ole junk debt like extended term car loans. Total consumer debt stood at $571 billion, a 3.7% increase from the same time last year. That means we added another $20.5 billion to the pile. The one-month annualized rate of change was 6.1%, which shows we’re also accumulating consumer debt faster than before.

Canadian debt is a runaway freight train. The government has laid down multiple cooling measures, and has been warning about unsustainable debt loads since 2011. Unfortunately, none of that worked. It’ll be interesting to see what event leads to Canadians being more conservative with their spending.

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  • Darren 7 years ago

    What is the maximum amount of debt canadians could go in? I mean will this get to 3 trillion? What number will it be at when everyone is stuck and cant really ever get out of debt and cant borrow anymore? Is that the point when housing could collapse? Interst rates cant and probably will never go up just becasue this.

    • Jim 7 years ago

      “Interst rates cant and probably will never go up just becasue this.”

      Sorry Darren, but that is wishful thinking at best!

      The US is already raising rates, and is almost definitely going to jack them up one more notch (0.25%) in two weeks time:

      And if you aren’t sure how/why what the US does affects us in Canada, here’s a quick primer:

      Long story short, the US doesn’t care about Canadians’ household debt, and they’ll drag us kicking and screaming into higher rates, sooner or later.

    • Mike 7 years ago

      Well that’s a part of the issue, it’s actually much higher. I read a post on here the other day where the Bank of Canada said they were estimating another $1 trillion in debt instruments in the shadow banking industry, and that’s just what they can find. There’s more instruments, and informal lending going around.

      Re: Interest rates, Japan has had low rates for decades now. Takes the economy out, devalues all current money. Cost of housing is junk now however, and whole neighborhoods in Tokyo are now abandoned. They’re still blaming the Chinese for their collapse, 30 years later. This is the future of Canada.

  • Global Debt Tsunami Crests Further in April – HoweStreet 7 years ago

    […] Another month, another dubious debt distinction for Canada.  See Canadians push past $2 trillion in debt to set a new record, again: […]

  • Canadians continue to pile up debt - ARIA post - Aria Pensions 7 years ago

    […] Canadians, it appears, are comfortable with debt, and are growing more comfortable with it as the days roll by. At least that’s one conclusion to the news that consumer debt has hit another record high of more than $2 trillion. As reported by Better Dwelling, Canadians seem to be tuning out all those warnings about debt load and the problems it contains: people with significant debt, including mortgage debt, could be in trouble when interest rates rise, and maintenance of debt usually means Canadians don’t have enough left over for other needs, including saving for retirement. The Bank of Canada’s latest report on the combined consumer debt load “shows Canadians didn’t slow down the rate they accumulated debt, they actually started acquiring it faster” with “residential mortgage and consumer debt” at all time highs, reports Better Dwelling. More: Debt loads climb to record highs. […]

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