OTTAWA (Reuters) - Canada’s record-high household debt levels, which have been a source of concern for the central bank and other policymakers, will only get worse this year, the country’s parliamentary budget watchdog warned on Tuesday.
The ratio of total household debt to disposable income is expected to rise to 174 percent late in 2016 from 171 percent in the third quarter of last year, before returning to close to current levels by the end of 2020, according to a report by the watchdog.
“Among G7 (Group of Seven leading industrialized) countries, Canada has experienced the largest increase in household debt relative to income since 2000,” the report by the office of the Parliamentary Budget Officer said.
“Households in Canada have become more indebted than any other G7 (Group of Seven) country over recent history.”
The report used somewhat different measurements than Statistics Canada, which said last month the ratio of household credit market debt to disposable income hit a record 163.7 percent in the third quarter of 2015.
The parliamentary watchdog added to the debt figures what it called “trade payables”, typically the liabilities of unincorporated businesses. It also uses a slightly different calculation of disposable income.
Reporting by Randall Palmer; Editing by Andrew Hay