Monthly credit aggregates, October 2022
Released: 2022-12-20
Household borrowing
In October, the total credit liabilities of households (including mortgage and non-mortgage loan debt) increased $9.8 billion (+0.4%) to reach $2,805.2 billion. Real estate secured debt, composed of both mortgage debt and home equity lines of credit, rose $7.7 billion (+0.3%) to reach $2,252.2 billion.
Chart 1
Month-over-month change in household mortgage loans
Household mortgage debt grows at slowest pace in two years as borrowing costs rise
Household mortgage debt grew 0.4% to reach $2,081.4 billion in October, the fifth consecutive month of slowed growth. The monthly rise of $7.7 billion from September to October was the smallest increase since June 2020. Compared with the same month of the previous year, household mortgage debt expanded 8.3% in October 2022 (on a seasonally unadjusted basis).
Household borrowing became more costly in October 2022 as the Bank of Canada continued efforts to curb inflation, and the policy interest rate reached 3.75% in October, up 50 basis points from a month earlier. Despite rising borrowing costs, the volume of existing home sales increased for the first time in eight months, up 1.3% in October, while the average sale price continued to decline, falling to roughly $657,000 in October. According to the New Housing Price Index, which is not seasonally adjusted, new home prices in Canada declined by 0.2% in October, the second consecutive monthly decline.
Chart 2
Year-over-year growth in household mortgage and non-mortgage loans
Households increase reliance on credit cards
Faced with inflationary pressures, households continued to increase their reliance on credit cards relative to other forms of non-mortgage debt in October. More than two-thirds of the $2.2 billion (+0.3%) increase in non-mortgage loans in October was in the form of credit card debt with chartered banks. Credit card balances were up $1.5 billion (+1.7%), the third consecutive month of higher growth. Credit card debt with chartered banks rose 14.7% from October 2021 to October 2022, compared with an increase of 0.8% from October 2020 to October 2021, while retail sales increased 1.4% in October 2022. Home equity lines of credit edged up $0.1 billion in October, reaching 85.9% of their historical peak recorded roughly 10 years prior, in December 2012.
Private non-financial corporation borrowing
Companies borrowing more from chartered banks
Private non-financial corporations relied more heavily on borrowing in October, as total credit liabilities (i.e., loans and debt securities) reached $1,965.5 billion, up 0.3% (+$6.2 billion) from the prior month.
Most of the increase in borrowing for private non-financial corporations was due to rising non-mortgage loan liabilities, which reached $901.6 billion in October, an increase of 1.0% (+$9.2 billion) from September. Growth in non-mortgage loans was driven by a 1.6% increase in borrowing from chartered banks (+$9.9 billion) in October, while borrowing from non-banks edged down 0.2% (-$0.7 billion).
Chart 3
Private non-financial corporation borrowing
Government non-mortgage loans to private non-financial corporations decreased 0.6% (-$0.4 billion) to reach $62.1 billion on continued net repayments and forgiven amounts related to the Canadian Emergency Business Account program. The mortgage debt of private non-financial corporations grew 0.4% for the third consecutive month to reach $362.4 billion.
On a seasonally unadjusted basis, private non-financial corporations recorded net retirements in debt securities in October, the sixth month of net retirements in the last seven months. Net retirements of long-term instruments (-$4.9 billion) more than offset net issuances of short-term instruments (+$0.9 billion).
Overall borrowing by private non-financial corporations, composed of the increase in the outstanding level of seasonally unadjusted loans and the net issuances of debt securities, was $3.8 billion in October. Since the start of 2022, there has been $5.3 billion in net retirements of debt securities, while loans expanded by $125.3 billion.
Note to readers
Unless otherwise stated, this release presents data adjusted for seasonality.
Revisions
This release of the monthly credit aggregates for the month of October 2022 includes revised estimates from January 1990 to September 2022. These data incorporate new and revised data, as well as updated data on seasonal trends.
Additionally, this release incorporates quarterly benchmarks from the national balance sheet from the first quarter of 1990 to the third quarter of 2022. Conceptual, methodological, and statistical enhancements were incorporated into the balance sheet and are summarized in: An overview of revisions to the Financial and Wealth Accounts, 1990 to 2022.
Overview of the monthly credit aggregates
The monthly credit aggregates break down a portion of the quarterly national balance sheet accounts (NBSA) by month. They provide details on lending to households and non-financial corporations—in other words, the stock of these sectors' outstanding liabilities from the debtor perspective—across a range of credit instruments, including mortgage loans, non-mortgage loans, and debt and equity securities. The aggregates cover all lending sectors, including chartered banks, non-bank deposit-taking institutions, other financial corporations, government and other lenders. The estimates are presented as booked-in-Canada to capture activity within Canada, with either domestic or non-resident lenders. In addition, amounts are reported on an end-of-period basis (i.e., the value of the stock of an asset on the final day of the month). The third month of each quarter is benchmarked to the corresponding quarterly release of the NBSA.
Household sector borrowing is divided into financing in the form of non-mortgage loans (i.e., funds principally for consumption) and mortgage loans (i.e., debt acquired to finance the purchase of a property, whether residential or non-residential in nature). Household borrowing in the form of mortgage debt and home equity lines of credit is referred to as real estate secured debt and presents a further delineation of household liabilities associated with residential and non-residential properties.
As with the household sector, non-financial corporation borrowing is divided into non-mortgage and mortgage loans. However, overall credit liabilities of non-financial corporations also include their borrowing in the form of debt securities, with terms to maturity that are both short term and long term in duration.
The NBSA are composed of the balance sheets of all sectors and subsectors of the economy. The main sectors are households, non-profit institutions serving households, financial corporations, non-financial corporations, government and non-residents. The NBSA cover all national non-financial assets and all financial asset-liability claims outstanding in all sectors and, similarly, they present stocks at the end of each quarter.
Estimates are available on a seasonally adjusted basis to improve the interpretability of period-to-period changes in debt. For information on seasonal adjustment, see "Seasonally adjusted data – Frequently asked questions."
For more information on the concepts, methodologies and classifications used to compile these monthly estimates, please see the document "Guide to the Monthly Credit Aggregates."
Next release
Data on the monthly credit aggregates for November will be released on January 19, 2023.
Products
As a complement to this release, the documents "Guide to the Monthly Credit Aggregates" and "A preview of revisions to the Financial and Wealth Accounts, 1990 to 2022," which are part of Latest Developments in the Canadian Economic Accounts (13-605-X), are available.
As a complement to this release, the data visualization products "Financial accounts on a from-whom-to-whom basis, selected financial instruments," "Distributions of Household Economic Accounts, Wealth: Interactive tool" and "Securities statistics," which are part of Statistics Canada – Data Visualization Products (71-607-X), are also available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, provides an up-to-date portrait of national and provincial economies and their structure.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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