Canadian debt to disposable income rates reached a record high in third quarter

December 14th, 2017  |  Canadian Business

The second quarter saw a rise in the Canada debt to disposable income rates, and as reported by Statistics Canada, this past quarter saw those rates climb even higher, setting a record high. This past quarter Canadians owed $1.71 for every dollar of disposable income.

Compared to the summer numbers, the end of September saw an increase of 1.4%, bringing the amount that Canadian households owed to $2.1 trillion. In addition to these findings, Statistics Canada also reported that $1.3 trillion out of the $2.1 trillion could be attributed to mortgage debt, a 1.5% increase over last quarter.

Some analysts are speculating that the high numbers this quarter, much like the high home sales this past month, can be attributed to those buying houses before the new mortgage rules come into play in January. The new rules will make it harder for many to obtain mortgages, which may in turn help lower the Canadian debt to disposable income ratio.

President of the Credit Counseling Society, Scott Hannah, expressed his concerns over the numbers. Hannah noted that he is especially worried this month with the holiday season in full swing, as Canadians tend to over spend this time of year.

"We are not surprised by this record-breaking household debt ratio, however we are concerned that a growing number of Canadians will put themselves at risk and be unable to maintain their household expenses and reduce debt levels in the future," Hannah said. "Canadians need to gain control of their finances and use a budget/spending plan to effectively manage their expenses."