Statistics Canada
Symbol of the Government of Canada

Canadians better able to pay back debt

Warning View the most recent version.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

The indebtedness of households, corporations and governments in the United States rose from 269% of GDP in 2002 to 329% in 2008. (Debt-to-GDP ratios are an indicator of the ability to meet one’s financial obligations.) Household debt rose to 97% of GDP by mid-2008, fuelled by the housing boom.

In Canada, domestic debt rose from 228% of GDP in 2002 to 255% in 2008, less than half the 60-point increase in the United States. Household debt rose to 85% of GDP, while non-financial corporations and governments paid down their debt. The Canadian financial system had debt equivalent to 60% of GDP in 2008, half the American level, while avoiding the corrosive impact of subprime mortgages.

Canada consistently ran large trade surpluses over the past decade, and Canadians placed much of this surplus in direct investment abroad, avoiding opaque financial instruments. By the end of 2008, Canada had no net external indebtedness for the first time since 1926.