TORONTO — Canadians’ collective household debt has climbed to $1.8 trillion as an international financial group sounds an early warning that the country’s banking system is at risk from rising debt levels. Equifax Canada says consumers now owe $1.821 trillion including mortgages as of the fourth-quarter of 2017, marking a six per cent increase from a year earlier. Although nearly half of Canadians reduced their personal liabilities, roughly 37 per cent added to their debt to push the average amount up 3.3 per cent to $22,837 per person, not including mortgages. The fresh numbers come as an international financial group owned by the world’s central banks says Canada’s credit-to-gross-domestic-product and debt-service ratios show early warning signs of potential risk to the banking system in the coming years. The latest report by the Bank for International Settlements says Canada’s credit-to-GDP gap and debt-service ratios have surpassed critical thresholds and are signalling red, pointing to vulnerabilities. The group, however, cautions that these indicators should not be treated as a formal stress test, but as a first step in a broader analysis.
Canada's household debt hit CAD1.8tn ($1.4tn) in Q4 2017, marking a 6% rise, YoY, and putting the nation's banking system at risk. The Bank of Canada has been warning for years that Canadians are living beyond their means as they borrow to fund an ever-increasing share of their family's expenses. Even so, nearly half of Canadians reduced their personal liabilities.