Spotlight on Canadians and Debt: Who's Vulnerable?

Release date: March 5, 2019
Spotlight on Canadians and Debt: Who's Vulnerable?
Description: Spotlight on Canadians and Debt: Who's Vulnerable?

Spotlight on Canadians and Debt: Who's Vulnerable?

Debt-to-income ratios in Canada continued to rise since the 2008-2009 recession, while they declined in the United States over the same period.

Household debt-to-income ratios (percent)
Year Canada U.S.
2005 132.3 130.6
2006 137.2 135.3
2007 144.9 137.9
2008 150.3 131.7
2009 158.2 130.9
2010 160.6 124.1
2011 161.8 117.1
2012 162.3 111.4
2013 162.9 112.4
2014 164.7 108.6
2015 166.9 105.5
2016 175.3 105.9
2017 176.1 105.2
2018 Q3 174.7 101.9

In Victoria, Vancouver and Toronto, debt-to-income ratios exceeded 200% in 2016, which means a household with $50,000 in after-tax income had over $100,000 in debt.

Household debt-to-income ratios by census metropolitan area
Census metropolitan area (CMA) Household debt-to-income ratio (percent)
Moncton 106
Fredericton 119
Quebec 131
Montreal 154
Ottawa-Gatineau 149
Toronto 210
Hamilton 183
Kitchener 124
London 113
Winnipeg 144
Regina 144
Saskatoon 139
Calgary 189
Edmonton 171
Vancouver 230
Victoria 240

Debt-to-income ratios were relatively high for those at the bottom of the income distribution in CMAs where housing prices have increased over the last few years.

Household debt-to-income ratios by after-tax income quintiles
After-tax income quintiles Household debt-to-income ratios (percent)
Montreal
Lowest 105
Second 101
Third 122
Fourth 172
Highest 173
Toronto
Lowest 420
Second 230
Third 250
Fourth 270
Highest 162
Vancouver
Lowest 400
Second 230
Third 180
Fourth 250
Highest 220

Over the last 5 years, home prices have increased notably in large CMAs.

  • 43% in Canada
  • 61% in Victoria
  • 68% in Vancouver
  • 58% in Toronto

Did you know?

  • 8.4% of Canadian families have less than $500 in net worth in 2016.Footnote 1
  • 18.6% of those in the lowest income quintile had less than $500 in net worth in 2016.

Stay tuned for more insights on Canadians and debt through our analytical publications.

Sources: Statistics Canada, Survey of Financial Security, 2016, and Table 38-10-0235-01; Board of Governors of the Federal Reserve System (United States), Table Z.1 Financial Accounts of the United States; U.S. Bureau of Economic Analysis, Table 2.1 Personal Income and Its Disposition, Quarterly and Annual; and MLS Home Price Index data from The Canadian Real Estate Association.

Note: Throughout this infographic, the term 'Canadian families' is used to describe economic families and persons not in economic families. Debt-to-income ratios at the national level were calculated based on concepts from the Macroeconomic Accounts and using disposable income. Note that estimates also include data from non-profit institutions serving households. Debt-to-income ratios by after-tax income quintile and census metropolitan area were calculated using after-tax income, based on concepts from the Survey of Financial Security, which defines after-tax income as total income (market income and government transfer payments) less income taxes (federal and provincial).

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