By Robb M. Stewart
OTTAWA--Household debt in Canada expanded slightly in the third quarter, even as Canadians accumulated financial wealth thanks to equity-market gains.
The ratio of household credit market debt to personal disposable income widened 0.4 percentage points on the quarter before to 176.7% in the July to September period, a fourth consecutive quarterly advance, Statistics Canada said Thursday in its quarterly report on national balance sheets.
That means households owe an average of 1.77 Canadian dollars, the equivalent of roughly $1.28, for every dollar of after-tax income they earn. While up, it remains below the record C$1.88 in the third quarter of 2022.
The data agency said total household credit-market debt, including consumer debt and mortgage and non-mortgage loans, grew 1.0% in the latest quarter. Mortgages accounted for almost three quarters of debt.
The rise in debt outpaced a 0.8% rise in disposable income.
Many Canadians built up savings and paid down debt during the pandemic, though overall household debt levels in the country have remained high for years. The household saving rate ticked up to 4.7% in the third quarter.
The household debt-service ratio, which is measured as total obligated payments of principal and interest in credit market debt as a proportion of household disposable income, eased to 14.64% in the latest quarter from a revised 14.68% the prior quarter, as declining mortgage interest payments were more than offset by obligated principal payments.
The Bank of Canada this week left its policy interest rate unchanged following back-to-back cuts, though it continues to expect tepid growth for the economy. Following a stronger-than-anticipated rebound in activity in the third quarter, the central bank still expects weak growth in the final quarter and maintains a forecast for soft growth of 1.1% next year.
Household net wealth for the quarter increased by roughly C$460.5 billion, or 2.6%, to C$18.394 trillion. That represented an eighth straight quarterly increase, and the largest gain in wealth since the first quarter of 2024. It came due to the rebound in gross domestic product for the period, and as financial assets were boosted by the continued rally in equity markets.
National net worth, which combines the value of national wealth and Canada's net foreign asset position, nudged up to C$19.382 trillion on an unadjusted basis from C$19.380 trillion the quarter before.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
12-11-25 0927ET
