Canadians’ debt to income improved slightly in the year’s second quarter.
According to Statistics Canada, Canadians took on slightly less new debt last quarter compared to what they earned, but they still owe $1.77 for every $1 they make. The debt to income ratio lowered by around 0.5% from the first quarter of 2019, from 177.54% to 177.1%.
It was the third consecutive quarterly decline, as income grew slightly faster than debt. Household disposable income increased 3.4% since the third quarter of 2018, while household credit market debt grew 2.8%.
Despite the improvement in earnings, the total debt owed by Canadians is still inching upwards. On a seasonally-adjusted basis, total credit market borrowing increased to $23.5 billion from $18.9 billion in the previous quarter. Credit market debt totaled $2.25 trillion in the second quarter including nearly $1.47 trillion in mortgage debt and $782.9 billion in consumer credit and non-mortgage loans.
