Where is the Money Now: The State of Canadian Household Debt as Conditions for Economic Recovery Emerge

In 2007, and then again in 2009, CGA-Canada set out to analyze the level of debt of Canadians, the risks associated with rising indebtedness, and the extent to which the recent financial and economic crises worsened the financial positions of Canadians. In the spring of 2010, CGA-Canada revisited the topic of household indebtedness aiming to identify perspectives of Canadians on the changing level of their indebtedness and wealth, and to examine these findings in the context of publicly available facts and figures. That was done by integrating the results of a public opinion survey commissioned by CGA-Canada with an analysis of available statistical information. The analysis shows that the measures of financial wellbeing of the household sector have deteriorated significantly over 2008 and 2009. Revolving credit has become a prevailing part of consumer credit and poses an increased risk of a debt spiral. The tremendous increase in the use of personal lines of credit was not supported by increasing equity in properties. Prospects of improving households’ financial situation in the near future remain unclear whereas regional perspectives are paramount to our understanding of the state of household finances.