Canadian Family Debt is Increasing

Stats Canada published another one of their interesting long term studies about Canadians, and this one is of particular interest to me (and hopefully you), Study: Changes in Debt and Assets of Canadian Families 1999 to 2012 . The actual full report (which is also an interesting, but longer read) can be found on the Stats Canada Web Site, as well.

The full report outlines the following:

This paper examines changes in debt, assets and net worth among Canadian families with debt over the period 1999 to 2012, by selected family characteristics. It also examines the extent to which two key ratios of indebtedness, the debt-to-income ratio and the debt-to-asset ratio, varied over the period.

  • In 2012, the percentage of Canadian families with debt was 71%, up from 67% in 1999. The median debt held by these families was $60,100, up from $36,700 in 1999 (in 2012 constant dollars).
  • Between 1999 and 2012, median debt and median assets increased for most types of families, but not equally for all categories of families. Median debt, for instance, increased faster among those in the 35-to-44 age group, among couples with children under 18, and among mortgagees.
  • Between 1999 and 2012, the median debt-to-income ratio rose from 0.78 to 1.10, while the median debt-to-asset ratio remained stable, at around 0.25. Families in the 35-to-44 age group witnessed significant increases in both their debt-to-income and debt-to-asset ratios.
  • In 2012, 35% of Canadian families had a debt-to-income ratio above 2.0—meaning that their debt was at least twice the level of their annual after-tax income. This compared with 23% of Canadian families in 1999.
  • In 2012, 14% of families had consumer debt (i.e., debt other than mortgage debt) that was larger than their annual after-tax family income. In comparison, 8% were facing the same situation in 1999.

So the long and the short of it is yes Canadians are carrying more debt, their assets are worth more, but as usual you need to look a little closer at some of the data to see the more disturbing findings in the report (that confirm things we all keep suspecting, younger Canadians with young families (with kids) are starting to drown and the ocean continues to rise). I put that last bullet in bold to emphasize the growing consumer debt “balloon” that is inflating without control and when interest rates go up, wait for the big bang.

Debt to asset and Debt to Disposable Income ratio

Debt and Asset as a Ratio

As you can see the value of assets has gone up as much as debt, however comparing it to disposable income is a little more worrisome.

Percentage of families with debt, 1999 and 2012
Table summary
This table displays the results of Percentage of families with debt 1999 and 2012, calculated using percentage units of measure (appearing as column headers).
1999 2012
Families with debt 67.3 71.1
Age of major income earner  
15 to 34 79.6 78.6
35 to 44 80.0 84.7
45 to 54 76.4 80.7
55 to 64 60.9 70.3
65 and over 27.4 42.5

This table has some more worrisome number showing that folks 65 and over “with debt” has increased significantly. Seniors carrying debt loads? Why?

Table 2
Median debt and assets, families with debt, 1999 and 2012
Table summary
This table displays the results of Median debt and assets Median debt, Change, Median assets, 1999, 2012 and 1999 to 2012, calculated using 2012 dollars units of measure (appearing as column headers).
Median debt Change Median assets Change
1999 2012 1999 to 2012 1999 2012 1999 to 2012

2012 dollars








Age of major
15 to 34 24,400 39,300 14,900 63,600 92,700 29,100
35 to 44 63,000 142,600 79,600 234,000 413,800 179,800
45 to 54 50,500 87,800 37,300 355,400 552,700 197,300
55 to 64 26,200 49,300 23,100 404,100 656,800 252,700
65 and over 8,500 18,000 9,500 310,100 484,300 174,200

The age group 35 to 44 has had it’s debt load double, and while it’s assets are up, they have not doubled. Is this a “debt bubble” that is going to go boom if interest rates go up?

So it seems our assets have increased in value (but that does include real estate, which has increased significantly over this period in most Canadian Cities).

Read the report, it is a worrisome read.


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