The debt-to-income ratio reached a new record high of 146.9 per cent in the first quarter of 2011.This is higher than the U.S. at the time of our crash, btw. And given higher taxes and cost of living the ability to carry debt is lower for Canadians.
While the pace of debt expansion declined in 2010 and the first quarter of 2011, household debt levels still reached a record high of $1.5 trillion in the first quarter of 2011.
If household debt was spread evenly across all Canadians, a family with two children would owe an estimated $176,461.
Consumption rather than asset accumulation remains the primary cause of the debt run up: 57 per cent of indebted respondents said day-to-day living expenses are the main cause for the increasing debt.
Single-parent families were the only category where debt increases with age, and they have two-thirds more debt than couples with no children.
The effective interest rate paid by households noticeably declined over the years; however, this did not transmute into easing debt-service burden. The mortgage debt-service ratio ended the 2010 year at the same level as it stood in 2003; the service burden caused by consumer credit experienced little change at all and was nearly identical in 2010 compared with some 20 years agoYou know what this means? It means Canadians better get their debt reduction act together while interest rates are low and/or they better be praying they stay low indefinitely.
The extent to which residential mortgages were backed by residential assets continued to deteriorate over 2010. This indicator stood at 65.7 per cent at the end of 2010, a level much higher than the 55.0 per cent average observed between 1990 and 2007.I confess, I'm not entirely sure what this means. Will edit when I figure it out.
On another note, I'm really looking forward to some hockey.