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 said in a new report Monday Canadian 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 46 per cent of Canadians reduced their personal liabilities, roughly 37 per cent added more debt in larger amounts on average, according to the credit reporting agency's latest report. In turn, the average amount of personal debt increased 3.3 per cent to $22,837 per person, not including mortgages.
``Despite the high debt, mortgage payments are generally on time, which could be attributed to low unemployment numbers and mortgage and auto finance interest rates which are still at historically low and reasonable levels,'' said Regina Malina, Equifax Canada's senior director of decision insights in a statement released Monday.
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
The latest report by the Bank of International Settlements (BIS) said Canada's credit-to-GDP gap and debt-service ratios have surpassed critical thresholds and are signalling red, pointing to vulnerabilities.