Islanders are getting a better handle on their debt than other Canadians, according to new data from Statistics Canada.
P.E.I. residents are managing debt better than other Canadians due to stable debt levels and income growth, according to new data from Statistics Canada. Amanda Sinclair, an assistant director with Statistics Canada's national economic accounts division, said the agency measures how manageable debt is for households through two key indicators.
Comparing the third quarter of 2024 to the same period in 2023, Sinclair said household debt levels on the Island have remained relatively stable, while household disposable income has grown significantly.P.E.I. families of 4 will pay roughly $800 more on groceries in 2025 This means that for every dollar of household disposable income, there was $1.73 in credit market debt. According to the report, this decline is primarily due to significant income growth outpacing increases in credit liabilities.Sinclair said multiple factors are driving the changes on P.E.I., but a major one is that Islanders are earning more.
"The fact that housing might be cheaper, their residents are able to save more money or invest more money, then the interest rates go up, and they're able to then earn bigger returns because they were able to put their savings into financial investments," she said.The report also finds for the first time in three years, households across all age groups have kept their debt service ratios stable.
Sinclair says younger households, especially those under 35, are reducing or avoiding new debt, particularly mortgages, likely due to interest rate hikes the past few years.
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