Personal debt in Canada rose 3% in the third quarter from a year earlier as high consumer prices and rising interest rates to lower them continued to impact household budgets.
According to Statistics Canada, there was $1.83 in debt for every dollar of household disposable income in the third quarter, up from $1.77 a year ago.
The record for household debt as a proportion of household disposable income is 184.6%, or almost $1.85 of debt for every dollar of disposable income. That record was set in the third quarter of 2018 prior to the COVID-19 pandemic.
Debt also continues to outpace incomes, with Statistics Canada reporting that household debt rose 1.2% in the third quarter while disposable income was up 0.8%.
As the Bank of Canada continues to raise interest rates, the cost of borrowing through mortgages and home equity lines of credit has risen as well.
Interest payments were up 16.2% in Q3, the largest increase on record, and interest payments as a share of overall debt payments grew to 51.3% from 46.7% in this year’s second quarter.
The total amount of household debt, which includes consumer credit and mortgage and non-mortgage loans, grew 1.2% in Q3 to $2.8 trillion.
