Canadians have less cash to spend even as they are taking on more debt, Statistics Canada reported Wednesday, at a time when interest rates are the highest they've been in decades.
On a seasonally adjusted basis, household credit market debt as a proportion of household disposable income rose to 184.5 per cent in the first quarter, up from 181.7 per cent in the fourth quarter of 2022, the agency said Wednesday.
"This will create additional headwinds for households with a high sensitivity to interest rates and could result in higher delinquency rates in the future," she said. "The combination of higher inflation and debt payments already soaked up all of the growth in household after-tax incomes last year, and looks likely to do so again in 2023," Janzen said.
The total seasonally adjusted stock of household credit market debt, which includes consumer credit and both mortgage and non-mortgage loans, rose 0.6 per cent from the fourth quarter of 2022 to $2.84 trillion in the first quarter of 2023, including $2.11 trillion in mortgage debt, Statistics Canada said.
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