Canadians dealing with debt prudently despite record levels: Fraser Institute

Canadians are carrying record amounts of debt, but they are managing their finances prudently, according to a report by the Fraser Institute.

The report by Philip Cross, former chief economic analyst at Statistics Canada, says the growth of household debt has slowed since 2009 and the cost of servicing that borrowing is at a record low share of income.

Cross says many Canadians have also shifted their borrowing from consumer credit to mortgages, locking in lower interest rates.

Concerns about the amount of debt Canadians are carrying have been raised as a key risk by the Bank of Canada and others.

Statistics Canada reported earlier this year that households in the fourth-quarter of last year owed about $1.63 in consumer credit, mortgage and non-mortgage loans for every dollar of disposable income.

However, Cross says debt must be viewed in context and the value of assets have also been growing faster, pushing up net worth.

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