The debt load of Canadian households, not including mortgages, has reached a record $1.8 trillion, up 6% from the first quarter of 2017, according to a new report by Equifax Canada.
Canadians now owe an average of $22,837 in non-mortgage debt.
The Equifax report comes a day after the Bank for International Settlements (BIS) warned that Canada is at risk for a banking crisis because of high consumer debt loads, particularly credit card debt.
Although nearly half of Canadians reduced their personal liabilities during 2017, roughly 37% of people added to their debt load during the year to push the average amount owed up 3.3% to $22,837 per person, not including mortgages. These fresh numbers from Equifax come as the BIS, 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 domestic banking system.
The latest report by the Bank of International Settlements says Canada’s credit to Gross Domestic Product 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.