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Statistics Canada says household debt edges up in Q3, net worth also rises

OTTAWA — Statistics Canada says household debt went up in the third quarter as household net worth also rose.

The agency says that on a seasonally adjusted basis, total borrowing increased to $28.5 billion for the quarter from $21.7 billion in the previous quarter.

It says Canadian households owed on average $1.759 for every dollar of income, up from the $1.754 in the previous quarter that was revised down from $1.771. The ratio, while up from the previous quarter, is still below the record high of $1.785 hit in the first quarter of 2017.

The household debt service ratio, which measures how much income goes to paying interest and principal, rose from 14.82 per cent to 14.96 per cent.

RBC senior economist Robert Hogue notes the service ratio is at an all-time high, and that with mortgage debt also re-accelerating, he sees little scope to remove household debt from the list of top vulnerabilities for the economy.

TD economist Ksenia Bushmeneva says rising equity values and home prices helped push household net worth up for a third consecutive quarter, rising by 0.9 per cent in the quarter, and that the debt service ratio should fall in the new year.

This report by The Canadian Press was first published Dec. 13, 2019.

 

The Canadian Press