The average household debt in Canada has risen 6% in the past year to $76,140.
BMO’s Annual Debt Report reveals that household debt—which includes credit cards, student loans and mortgages—has increased in each region across Canada, except for the Prairies and Ontario.
Alberta remains the province with the highest household debt, $48,698 above the national average. Alberta and British Columbia are above the national average, while the other provinces are below.
Other noticeable regional differences include the following:
- Albertans have nearly twice the average household debt than Ontarians ($124,838 versus $67,507, respectively);
- Atlantic Canadians took on more than $16,000 of household debt this year, compared with 2013;
- British Columbians also took on more debt—$20,745 more this year than last; and
- those in the Prairies reduced their debt by $13,000 from last year.
“Part of the reason household debt in Alberta is so much higher than in other provinces may be due to rapidly rising house prices, which have caused homebuyers to take on larger mortgages,” says Sal Guatieri, senior economist with BMO Capital Markets.
The report also reveals the type of debt Canadians have in 2014 compared to last year:
- 43% of Canadians hold mortgage debt, an increase of 13 percentage points year over year;
- more than half of Canadians have a credit card balance, but the number of households has dropped to 52% this year from 56%; and
- student loans have remained stable, with 15% of Canadian households reporting this type of debt.
The rising share of households with a mortgage is partly driven by the active participation of first-time buyers, mainly young Canadians, notes Guatieri.
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