The Last Time Canadian Household Debt Grew This Slow Was 1983

Canadian households have abruptly cooled their appetite for credit. Bank of Canada (BoC) numbers show households reached a record level of debt in December 2018. Despite reaching new highs, Canadians are less keep on borrowing right now. It’s not just due to the decline in home sales either – consumers are starting to cool their borrowing as well.

Canadian Household Debt Tops $2.16 Trillion

Canadians pushed household debt to a new record high in 2018. Outstanding household credit hit $2.16 trillion in December, up 0.29% from the month before. This represents a 3.1% increase when compared to the same month last year. Sure, it’s growing – but Canadians haven’t seen growth like this outside of a recession.

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 annual pace of growth is something most of our readers can’t remember (if they were even born). The annual pace of 3.1% observed in December is over 39% lower than the same month last year. The last time it was this low was in June 1983, over three and a half decades ago. Let’s break this down to see if the weakness is in a segment, or a broad concern.

Canadian Household Debt Outstanding In Dollars

Total debt held by Canadian households, in Canadian dollars.

Source: Bank of Canada, Better Dwelling.

Canadians Owe Over $1.546 Trillion In Mortgage Debt

The majority of debt was on mortgages, which printed a new all-time record. Outstanding mortgage debt reached $1.546 trillion in December, up 0.39% from the month before. This represents an increase of 3.1% when compared to the same month last year. As stated earlier this week, the 12 month change of growth has only been lower for one month in 2001, in the past 30 years.

Canadian Household Debt Change

Annual percent change in debt held by Canadian households.

Source: Bank of Canada, Better Dwelling.

Canadian Consumer Credit Made The Slowest Growth Since 1992

Households printed a record for consumer debt, but are starting to look tapped out. Consumer debt stood at $620 billion in December, up just 0.05% from the month before. This represents a 3% increase compared to the same month last year. The annual change is the slowest since February 2016, but the monthly one is the standout this month. The month-over-month change was the lowest since 1992. That was right around the end of the last home buying spree.

Tighter mortgage lending is being blamed for slow credit, but we can see it’s broader than that. Both mortgage and consumer credit is slowing to record lows. More likely, we’re seeing a discrete change in consumer sentiment.

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.

  • Im Therious 5 years ago

    Debt should be charted as per capita, otherwise, the growth is exaggerated.

    • Marcus P 5 years ago

      I think you’re missing the point. If the growth is exaggerated, that’s a bigger problem. It’s at a recession level of growth. That’s WITH immigration driving credit consumption.

    • MH 5 years ago

      There are debt per household and debt per GDP numbers to satisfy this type of interest. Let’s say they are rather “exaggerated” too.

  • NJ 5 years ago

    are we brewing 1981-82 type recession right now…

  • CanadaSucks 5 years ago

    Canadian Household Debt Outstanding In Dollars is the typical exponential curve.

    Would be interesting to pass a exponential regression on the curve to get the exponential values and yearly growth rate. Really rare to find a perfect exponential like that, unless it is voluntary. I would curious to see internal memos between Bank of Canada, CHMC and finance minister.

    • CanadaSucks 5 years ago

      Over a period of 47 years Canadian Household Debt Outstanding In Dollars we get this

      1971 18 000$
      2018 1 539 000$

      18 000*(1+i)exp47=1 539 000

      (1+i)exp47= 85

      Roughly at 10% growth rate per year we get (1+0,1)exp47=88

      Basically the household debt has grown by 10% a year for 47 years.

      Still believe that the actual Canada statistic inflation rate of 2 % per years/

      Don’t worry, there is no housing bubble anywhere Canada, rush in and buy some more real easte.

      • CanadaRocks 5 years ago

        I appreciate your comment. I dont appareciate your name.

        • Mike 5 years ago

          Not positive here but I believe his name is a knock against Canada’s debts and financial failures, as well as the general Canadian public failures to be educated about debts and economy etc.

  • Trustee 5 years ago

    The continual climb of household debt may be slowing down in 2019, but there is a ton of it out there as rates are now rising. We recently blogged on the topic:


  • Howard 5 years ago

    Demographics ?

    Average boomer is now 62 or 63.

    They have bought their biggest house. And the average millennials is 27 – and their househould formation years have been delayed – with much education and higher student loan debt vs prior generations.

  • Wilmer Lau 5 years ago

    This site has the best Comment Policy EVER. Can’t this comment policy be for the entire web?

  • Robert 5 years ago

    So what’s the conclusion? It must be good that Canadian debt is not growing like crazy anymore. If you look at Aug 2013 datapoint (4.01% debt growth) same article about lowest debt growth since 1982 could have been written in Aug 2013. But what is implied from this data point related to house prices? If same article was written in 2013 and we look at crazy price jumps 2013-2017, we can conclude that this indicator has no correlation to prices. Honestly speaking I’m so surprised there was no huge debt growth spike in 2017 when market was nuts and people were buying detaches at crazy high prices. I would expect much higher debt growth in 2017.

  • Bailing in BC 5 years ago

    The most horrifying statistic in this article was that 1983 was three and a half decades ago.

    Does this mean I am old?

  • Zenity 5 years ago

    Here is the fundamental problem, earnings (let’s be generous and use nominal) of Canadians have increased very slowly over the last 10 years while housing ( a necessasity) increased atleast 3000% in all major cities. How on earth do you expect consumers to take on more credit. The major problem here is when you QE there is an extremely uneven access to credit created. Hence causing major inequality, on top of that you facilitate these free credit into housing inessence creating huge tax on younger generations. This will only lead to one out come, resurgence of socialism. Short sighted policies are horrible, they need to bite the bullet and deflate housing before the next QE hits or we will lose our social stability.

  • Nick 5 years ago

    Why does no one seem to know the difference between housing affordability and mortgage payment affordability? An affordable house is one you can buy without borrowing any money. In this country such thing disappeared many decades ago. An affordable monthly payment is one you can make without borrowing money. The only thing one can afford there is not choking on the monthly expense.

Comments are closed.