Debt Nation: The State Of Rising Consumer Debt In Canada
Canada has become a country of borrowers, not savers is now a given. Accumulating high levels of household debt has become a necessity for a modern life – and arguably a new normal.
According to Statistics Canada, 71 per cent of all Canadian families carried some form of debt in 2012 (the most recent data available), up from 67 per cent in 1999. Median debt held in 2012 was $60,100 compared to $36,700 in 1999. That number includes mortgages, as well as money to purchase cars, pay for education, new kitchens and many of the basics Canadians consider the staples of modern middle-class life.
Households with at least $100,000 or more in total income account for 37 per cent of all debt in Canada, according to Statistics Canada. Those with income of at least $50,000 but less than $100,000 represent 38 per cent. In other words, the vast majority of this debt is owed mostly by middle and upper earners, professionals with university degree.
It is interesting to see the average household debt on the rise (by city):
These statistics show that debt has achieved unprecedented levels in Canada. Debt has not only lost its negative connotation; it’s become more culturally acceptable in Canada than ever before.
Last week, the Bank of Canada raised its benchmark interest rate by a quarter point for the fifth time since last summer. It now sits at 1.75%, the highest it’s been since December 2008. What does that means for you? Your debt is getting more expensive!
On the positive side, there are many individuals researching and using tools to help them reduce and eliminate their debts all together. Don’t accept getting into and staying in debt. It’s not normal, and not a financial and healthy place for one to be in over a long period of time. If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt over time.