Canadian Household Debt Study

This past year has seen a worsening cost of living crisis as prices rise faster than incomes. The result is that many Canadians are forced to take on more debt to get by. With interest rates rising faster than ever before, this debt is extremely expensive, hurting many in the nation.

Dollarwise looks at the latest household data, finding that credit card debt has increased significantly to $19,805 on average. Mortgages, auto loans and total debt have also increased over the past year.

Key Findings

Total household debt increased 0.3%. The total credit liabilities of households increased 0.3% (+$9.4 Billion) to reach $2.91 Trillion.

Mortgage growth consistent. At 0.3%, the pace of growth for mortgage debt was roughly the same for the fifth month in a row. Around 45% of mortgages are still on lower rates and are expected to renew at much higher rates in 2024 and 2025.

Credit card debt growing quickly. In the past 12-months, credit card debt per household grew 12.34%, suggesting that Canadians are still struggling to payoff their credit card bills. In recent months this growth has slowed, likely as households are forced to reduce spending.

Home sales begin to rebound. Sale of existing homes (not new builds) rebounded in January 2024, with the number of deals closed increasing 3.7% between December 2023 and January 2024.

68.1% of the population make less than $99,999 in annual household income after tax.

The three provinces with the largest disposable incomes based on the latest data were Ontario ($636.09 Billion), Quebec ($338.31 Billion), and British Columbia ($242.13 Billion)

The three provinces with the smallest disposable incomes based on the latest data were Nunavut ($1.27 Billion), Yukon ($2.39 Billion), and Northwest Territories ($2.44 Billion)

Here’s the latest data (published February 2024) of what Canadian households owed in total and the average amount per household:

Type of DebtTotal owed by an average Canadian household with this debtTotal owed in Canada
Any type of debt$181,875$2.91 Trillion
Credit cards (total)$22,754$105.17 Billion
Credit cards (revolving)*$9,329$43.00 Billion
Mortgages$338,823$2.16 Trillion
Auto loans$22,637$101.02 Billion
Data from Statistics Canada “Credit liabilities of households” is used for the total national debt.

The calculation was done as follows: Number of households (2.4 people per household) based on the most recent national census.

Then, the percentage of households with each type of debt is from the most recent “Canadian Financial Capability Study.

Using this we can calculate the total debt per household with each debt type.

* revolving debt is calculated as 41% of the total credit card debt, the percentage of households that let debt revolve to the next month according to the 2019 capability study.

“Credit card debt isn’t always a sign of excessive spending. Many Canadians are hurting from higher prices and wages that aren’t keeping up with the rapid inflation, causing many to go further into debt to pay for basics like food and shelter.”

Jack Prenter, CEO of Dollarwise

Cost of living is increasing significantly faster than incomes

Each year, we look at growth in the cost of living compared with that of household income over the preceding decade to determine whether income is keeping up with expenses.

When using that 10-year time frame, we found income is not keeping up as closely as it should to make living relatively comfortable: Median household income has grown by 44% since 2012, while overall expenses have increased by 28% in the same span.

But the story changes radically when you look at short-term growth, due to the COVID-19 pandemic and unusually high inflation.

Cost of Living vs. Income, 2012-2023

Data sourced from StatCan’s data sets, ‘Consumer Price Index‘ and ‘Income of Individuals in Canada‘.

According to the study done by StatCan, the household distribution based on household after-tax income is as follows:

  • 13.5% make less than $30,000
  • 25.8% make between $30,000 and $59,999
  • 28.8% make between $60,000 and $99,999
  • 11.7% make between $100,000 and $124,999
  • 15.3% make between $125,000 and $199,999
  • 4.8% make more than $200,000

This pattern is slightly unusual since you’d expect the percentages to go up (to a certain point) and then fall back down in linear fashion.

But in Canada, there are fewer households that make between $100,000 and $124,999 than there are households that make between $125,000 and $199,999.

While this information is slightly on the older side (2020 report), a follow-up study has not been done, to date, by StatCan so it’s the latest info available.

Mortgage Cost to Income Ratios

QuarterHousehold IncomeMortgage Debt PaymentsMortgage Cost-to-Income Ratio
Q3 2018$1.859 Trillion$92.42 Billion4.97%
Q4 2018$1.884 Trillion$94.12 Billion4.99%
Q1 2019$1.900 Trillion$96.36 Billion5.07%
Q2 2019$1.932 Trillion$98.20 Billion5.08%
Q3 2019$1.949 Trillion$99.72 Billion5.12%
Q4 2019$1.978 Trillion$100.49 Billion5.08%
Q1 2020$1.992 Trillion$100.18 Billion5.03%
Q2 2020$2.084 Trillion$95.05 Billion4.56%
Q3 2020$2.055 Trillion$99.73 Billion4.85%
Q4 2020$2.047 Trillion$102.32 Billion5.00%
Q1 2021$2.112 Trillion$104.44 Billion4.94%
Q2 2021$2.133 Trillion$106.47 Billion4.99%
Q3 2021$2.162 Trillion$106.63 Billion4.93%
Q4 2021$2.160 Trillion$107.64 Billion4.98%
Q1 2022$2.227 Trillion$110.22 Billion4.95%
Q2 2022$2.254 Trillion$115.49 Billion5.12%
Q3 2022$2.294 Trillion$122.49 Billion5.34%
Q4 2022$2.354 Trillion$130.58 Billion5.55%
Q1 2023$2.395 Trillion$137.69 Billion5.75%
Q2 2023$2.439 Trillion$142.04 Billion5.82%
Q3 2023$2.476 Trillion$145.51 Billion5.88%
Source: StatCan study on the Debt Service Indicators of Households

We can see that until Q2 2022, the Mortgage Cost-to-Income Ratio fluctuated around 5%, sometimes dipping below it, with the lowest ratio being in Q2 2020 (4.56%), soon after the Covid-19 pandemic hit.

However, Q2 2022 was the start of the consistent increase of the Mortgage Cost-to-Income ratio.

Each subsequent quarter showcases this increase of roughly 0.20% per quarter. The ratio is getting closer to 6% and in fact, it might have reached it but we don’t yet have the Q4 2023 info from StatCan.

What all of this means is that people are paying more and more for mortgages (which is to be expected due to the increase in mortgage loan interests and costs) while the average Canadian household income isn’t keeping up as fast.

This can have very impactful results in the near future, especially if the ratio continues increasing (though it did show some semblance of slowing down between Q1 and Q2, and Q2 and Q3 2023).

However, the Canadian Real Estate Association has come out with a new analysis on Canadian home sales that shows some signs of recovery.

Seasonally adjusted monthly home sales activity was 3.7%, month-over-month, in January 2024. There has also been an increase in newly-listed properties by about 1.5%.

The biggest and most impactful change has been the average sales price; when comparing January 2024 and January 2023, the average sales price increased by 7.6%, to a staggering $659,395.

With prices going up and more properties going on sale, an increase in mortgage costs and payments (and debt) is to be expected.

Auto Loans Going Up – Too Many Fancy Cars?

In the past 2 years, the number of car loans in Canada has gone up by 9.54% which further showcases the need for people to take out extra loans to finance certain parts of their lives.

Vehicles are a necessity, especially covering long distances, but the increasing number of car loans shows us that Canadians seem to be struggling to make ends meet.

Year & MonthAuto Loan Credit Liabilities of Households (+Mo% change)
November 2021$92.43 Billion
December 2021$92.18 Billion (-0.27%)
January 2022$91.84 Billion (-0.37%)
February 2022$91.80 Billion (-0.04%)
March 2022$92.18 Billion (+0.41%)
April 2022$92.29 Billion (+0.12%)
May 2022$92.96 Billion (+0.72%)
June 2022$93.48 Billion (+0.55%)
July 2022$93.65 Billion (+0.18%)
August 2022$94.46 Billion (+0.86%)
September 2022$95.48 Billion (+1.08%)
October 2022$96.04 Billion (+0.59%)
November 2022$96.27 Billion (+0.24%)
December 2022$96.18 Billion (-0.09%)
January 2023$96.24 Billion (+0.06%)
February 2023$96.49 Billion (+0.26%)
March 2023$96.87 Billion (+0.39%)
April 2023$97.30 Billion (+0.44%)
May 2023$98.26 Billion (+0.98%)
June 2023$99.28 Billion (+1.04%)
July 2023$100.07 Billion (+0.79%)
August 2023$100.74 Billion (+0.67%)
September 2023$101.03 Billion (+0.29%)
October 2023$101.26 Billion (+0.23%)
November 2023$101.25 Billion (-0.01%)
Data taken from StatCan’s study on ‘Credit Liabilities of Households’. Dataset used is from November 2021 to November 2023, showing the auto loan trend over 2 years. Percentages calculated to easily show the monthly change in household auto loans.

On the other hand, the increase in car loans is also down to more luxury car purchases.

While costs of living are higher than before with average income not presenting enough of the buying power it once had, those who are well off are more likely to take out a car loan for a new, fancy car.

Truthfully, it is a combination of the two, and a few other factors. For instance, the price of used vs new cars has diverged in recent years, as shown by the StatCan study on the used car market changes (12-month percentage change).

Year & MonthUsed VehiclesNew Vehicles
January 20201.03%2.27%
February 20202.78%2.24%
March 20200.73%1.03%
April 20200.68%1.88%
May 2020-0.49%1.98%
June 20200.20%2.82%
July 20202.80%3.29%
August 20203.62%2.19%
September 20203.36%2.69%
October 20203.33%2.94%
November 20205.30%2.01%
December 20205.62%2.45%
January 20217.11%2.87%
February 20218.13%2.79%
March 20218.24%3.49%
April 202110.20%3.39%
May 202111.73%4.94%
June 202114.44%4.10%
July 202112.61%5.52%
August 202113.82%7.13%
September 202113.57%7.22%
October 202115.28%6.13%
November 202114.98%6.03%
December 202118.32%7.21%
January 202219.71%5.20%
February 202220.64%4.70%
March 202224.50%7.20%
Data used from StatCan study showing used and new vehicle price percentage changes (in a 12-month percentage change format).

The data shows us that new vehicle prices have changed by a maximum of 7.22% while used car prices keep getting higher and higher, with a peak of 24.50% increase in March 2022.

In conclusion, Canadian’s of all sorts of financial backgrounds and statuses are taking out more car loans than before, at higher interest rates and prices.

While there were a few periods of stability and/or stagnation, all evidence points to a trend of ever-increasing number of car loans and vehicle prices in Canada.

Household Disposable Income (By Province)

Province/Year202020212022
Alberta$193.88 Billion$197.61 Billion (+1.92%)$209.66 Billion (+6.10%)
British Columbia$221.40 Billion$230.02 Billion (+3.89%)$242.13 Billion (+5.26%)
Manitoba$47.23 Billion$47.99 Billion (+1.61%)$49.94 Billion (+4.06%)
New Brunswick$27.03 Billion$27.99 Billion (+3.55%)$29.34 Billion (+4.82%)
Newfoundland & Labrador$19.63 Billion$20.70 Billion (+5.45%)$20.58 Billion (-0.58%)
Northwest Territories$2.29 Billion$2.35 Billion (+2.62%)$2.44 Billion (+3.83%)
Nova Scotia$34.22 Billion$35.46 Billion (+3.62%)$36.53 Billion (+3.02%)
Nunavut$1.30 Billion$1.25 Billion (-3.85%)$1.27 Billion (+1.6%)
Ontario$586.56 Billion$600.90 Billion (+2.44%)$636.09 Billion (+5.86%)
Prince Edward Island$5.50 Billion$5.94 Billion (+8.00%)$6.28 Billion (+5.72%)
Quebec$297.61 Billion$309.34 Billion (+3.94%)$338.31 Billion (+9.36%)
Saskatchewan$45.27 Billion$44.70 Billion (-1.26%)$49.97 Billion (+11.79%)
Yukon$2.14 Billion$2.26 Billion (+5.61%)$2.39 Billion (+5.75%)

Interest Paid (By Province)

Province/Year202020212022
Alberta$11.86 Billion$10.67 Billion (-10.03%)$12.20 Billion (+14.34%)
British Columbia$15.98 Billion$15.13 Billion (-5.32%)$18.65 Billion (+23.26%)
Manitoba$2.30 Billion$2.10 Billion (-8.69%)$2.47 Billion (+17.62%)
New Brunswick$1.32 Billion$1.19 Billion (-9.84%)$1.41 Billion (+18.49%)
Newfoundland & Labrador$0.97 Billion$0.86 Billion (-11.34%)$0.98 Billion (+13.95%)
Northwest Territories$0.08 Billion$0.08 Billion (~0.01%)$0.09 Billion (+12.50%)
Nova Scotia$1.79 Billion$1.63 Billion (-8.94%)$1.91 Billion (+17.18%)
Nunavut$0.02 Billion$0.02 Billion (~0.01%)$0.02 Billion (~0.01%)
Ontario$43.39 Billion$42.04 Billion (-3.11%)$51.63 Billion (+22.81%)
Prince Edward Island$0.26 Billion$0.24 Billion (-7.69%)$0.30 Billion (+25.00%)
Quebec$16.43 Billion$15.46 Billion (-5.90%)$18.95 Billion (+22.57%)
Saskatchewan$2.37 Billion$2.13 Billion (-10.13%)$2.44 Billion (+14.55%)
Yukon$0.09 Billion$0.09 Billion (~0.01%)$0.11 Billion (+22.22%)
Percentages show the yearly change. Data in both tables sourced from StatCan (Data published in November 2023)

Only two provinces experienced a negative household disposable income trend between 2020 and 2021 – Nunavut (-3.85%) and Saskatchewan (-1.26%). The Newfoundland & Labrador province is the only one with a negative disposable income trend between 2021 and 2022 (-0.58%)

Saskatchewan had the biggest household income increase between 2021 and 2022 at +11.79%. For the period between 2020 and 2021, Prince Edward Island showed the biggest increase at +8.00%

Northwest Territories’, Nunavut’s, and Yukon’s amount of interest paid was virtually unchanged between 2020 and 2021 ($0.08, $0.08, and $0.09 Billion, respectively, with a ~0.01% change between those two years)

Three provinces exhibited more than -10% of interest paid changes between 2020 and 2021 – Alberta (-10.03%), Newfoundland & Labrador (-11.34%), and Saskatchewan (-10.13%)

There were also no provinces with positive trends regarding interest paid between 2020 and 2021

Mortgage Rates Are Up and May Go Higher

Year & MonthMortgage Rate
December 20213.45%
January 20223.44%
February 20223.58%
March 20223.77%
April 20224.19%
May 20224.63%
June 20225.05%
July 20225.51%
August 20225.58%
September 20225.64%
October 20225.75%
November 20225.88%
December 20225.89%
January 20235.86%
February 20235.81%
March 20235.81%
April 20235.75%
May 20235.74%
June 20235.85%
July 20235.99%
August 20236.17%
September 20236.27%
October 20236.42%
November 20236.47%
December 20236.39%
Source: StatCan study on the Canada Mortgage and Housing Corporation, Conventional Mortgage Lending Rate, 5-year term

In the past 24 months, there were only a handful of times when the mortgage rate didn’t go up. It either stagnated or reduced by a very small margin. And it’s been steadily increasing since May 2023, changing by almost 1%.

Increasing mortgage rates means that Canadians will have to pay more as time goes by, meaning they’ll potentially have to take out more credit, meaning their buying power will decrease and the Mortgage Cost-to-Income Ratio will increase.

This may eventually lead to a repeat of the current cycle if nothing in the financial landscape changes, bringing us back to the sentiment of the intro of this analysis – that the Canadian average household income won’t keep up with debts and interest rates.

Conclusion

Based on the data and evidenced we’ve gathered and compared, it is evident that most Canadians are struggling financially.

Cars are slowly becoming a luxury seeing how there isn’t much of a difference regarding financial strain, regardless of their choice of vehicle (used or new).

Credit card debt is also on the rise, with a quarter of the population earning less than $60,000 (per household!), and mortgage debt is still the largest contributor to the overall Canadian household debt.

With average housing prices reaching more than $650,000, it’s difficult to see the possibility of mortgage debt decreasing in the near future. All of the spending trends and pain points are showcasing growth, with even the Middle Class stumbling into quite a lot of debt.

Unfortunately, when it comes to average income, its trend is not following the increase in prices, mortgages, and interest rates.

It is due to this combination of factors (incomes that aren’t keeping up, everything becoming more expensive, etc.) that the average Canadian household debt is continuing to grow, with no signs of slowing down or stopping altogether.

Canadian Household Debt FAQs

How Much do Canadian Households Owe in Debt?

Canadian household debt is sitting at its all-time high of $2.91 Trillion which puts the average household debt at $181,875. Most of the Canadian household debt comes from mortgages, at $2.16 Trillion.

What is the Canadian Debt-Per-Person Currently?

According to a study done by the Fraser Institute, the federal net debt per person in 2022/23 was $32,954 – up 54.8% compared to 2007/2008.

On a provincial level, British Columbia had the lowest ($10,601, an increase of 40.4% compared to 2007/2008), and Newfoundland & Labrador had the highest ($30,486, an increase of 12.3% compared to 2007/2008).

What is the Typical Debt for 50 Year-Old Canadians?

According to a survey done by The Globe and Mail, 50-59 year-old Canadians have roughly $566,000 in average debt. Mortgages make up around $370,000 of overall debt.

Are Canadians in Too Much Household Debt?

Canada is the country with the 2nd most household debt out of all G7 countries (Australia being first) and its economy is very vulnerable to any global crisis that involve the economy and the financial world.

Currently, the Canadian household debt makes up 107% of the country’s GDP, meaning there’s more debt than the economy can handle.

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