The amount of debt Canadians owe grew in the second quarter of the year, according to new data from Statistics Canada.
The federal statistics agency said that debt as a proportion of Canadians’ disposable income rose to 169.1% in the second quarter as an increase in debt outpaced rises in income.
At the end of June, Canadians owed $1.69 in debt for every dollar of disposable income they had available to them.
The second quarter debt ratio was up from 168.3% in the first quarter. However it was down slightly from 169.7% in the second quarter of 2017.
The Bank of Canada has identified household debt as a key vulnerability for the financial system and cited concerns about debt levels on several occasions. In total, Canadian households borrowed $19.6 billion in the second quarter, down from $22.2 billion in the first quarter of the year.
The rise in debt levels in the second quarter was linked to consumer credit as mortgage loans declined in the period between April and June. The decrease in mortgage lending came as the housing market slowed amid tighter mortgage rules and rising mortgage rates took hold across the country.
Household credit market debt, which includes consumer credit on items such as credit cards, as well as mortgage and non-mortgage loans, totaled $2.16 trillion in the second quarter of the year.
