The amount of debt Canadians owe relative to their income grew last quarter as debt growth slightly outpaced income growth, Statistics Canada (StatCan) said on Thursday.
StatCan reported that seasonally-adjusted household credit-market debt, as a proportion of disposable income, rose to 178.5% in Q4 2018, a bit higher than the revised reading of 178.3% in the previous quarter. That means that there was roughly $1.79 in credit market debt for every dollar of household disposable income in the fourth quarter.
Meanwhile, the household debt-service ratio, the total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose to 14.9% in the fourth quarter compared with the revised reading of 14.7% in the third quarter.
An increase in borrowing helped fuel the rise in the two key debt ratios.
StatCan said that on a seasonally-adjusted basis, households borrowed $21.2 billion in Q4 2018 as mortgage-loan demand rose by $2.3 billion to $12.3 billion. However, despite the increase in the quarter, on an annual basis, household credit-market borrowing fell by 19.5% to $84.6 billion last year, the lowest level of borrowing since 2014.
Credit-market debt, which includes consumer credit and mortgage and non-mortgage loans, totalled about $2.21 trillion last quarter. Mortgage debt reached about $1.44 trillion, while consumer credit and non-mortgage loans combined amounted to $769.4 billion, according to a report by The Canadian Press.
