A key measure of consumer debt continues to swell in Canada.
The level of household credit market debt to disposable income reached 164.6% in the third quarter of the year, Statistics Canada said today, up from 163.3% in the second quarter.
Today’s numbers underscore the efforts of the country’s policy makers to cool down consumer borrowing.
Bank of Canada Governor Mark Carney has oft warned of the swelling debt burden, while Finance Minister Jim Flaherty has moved several times to tame the mortgage market, leading to a cooling in the housing market.
Carney has noted that credit growth is slowing, and, indeed, Statistics Canada said today the third-quarter rise was slower than that of the previous three months.
New borrowing by households amounted to $27.3 billion in the third quarter as mortgages rose by $18.4 billion to $1.1 trillion. Consumer credit levels climbed to $474 billion from $467 billion.
National net worth grew at the same time, by more than $9 billion to $6.8 trillion, or, on a per capita basis, $194,100.
Household net worth jumped 1% on gains in share prices and pension plan holdings.
On a per capita basis, household net worth rose to $197,900 from $196,400.
In its latest financial system review, the Bank of Canada warned again that the biggest domestic threat to Canada "continues to stem from the elevated level of household indebtedness and stretched valuations in some segments of the housing market."
The central bank said the pace of growth eased over the past six months but the rate still outpaced that of disposable income, posing obvious troubles should unemployment spike and when interest rates inevitably rise.
