TORONTO - A new bank study suggests the average Canadian household is more than $100,000 in debt and that Canadians have ramped up borrowing in the past five years.
The first annual BMO survey on household debt found that average household debt among Canadians surveyed stands at $112,329, including mortgage, credit card, line of credit and loan debt.
But the bank says so-called good debt like mortgages outweighs less favourable forms of borrowing.
While 25 per cent of those surveyed say they are debt free, 41 per cent say that they have taken on more debt in the past five years as a result of increased spending.
And 54 per cent of respondents said they expect to be debt free in the next five years.
The survey also found that 70 per cent of Canadians believe they can afford to pay down debt by paying more than the minimum, but one-third appear to be stretched with paying only the minimum amounts.
The report, conducted by Leger Marketing to measure the amount of debt Canadian households are carrying and how it's managed, surveyed 1,507 Canadians in an online poll at the beginning of April.
- Canadian Household Debt By Region
- 6. Atlantic Canada: $69,300
- 5. Quebec: $78,900
- 4. Manitoba & Saskatchewan: $84,900
- 3. Ontario: $124,700
- 2. British Columbia: $155,500
- 1. Alberta: $157,700
How Canada's Debt Burden Compares
Canada <a href="http://www.cga-canada.org/en-ca/ResearchAndAdvocacy/AreasofInterest/DebtandConsumption/Pages/ca_debt_default.aspx" target="_hplink">hit a record high</a> in the first quarter of 2011, reaching $1.5 trillion in household debt. If spread evenly across Canada, that means every family with two children has $176,461 in debt. In the U.S., <a href="http://blog.unibulmerchantservices.com/u-s-household-debt-holds-steady-in-2011-q1/" target="_hplink">household debt</a> hit $11.5 trillion by the end of March this year. The average household debt in the U.S. for a family of four is $148,000.
Loans owed to Canada Student Loans amount to <a href="http://www.cfs-fcee.ca/studentdebt/index.html" target="_hplink">nearly $14 billion</a> and rising. In the U.S., where tuitions are considerable higher, loans owed <a href="http://www.finaid.org/loans/studentloandebtclock.phtml" target="_hplink">exceed $932 billion</a>, including federal and private loans.
With their debt ceiling raised again, the U.S. has <a href="http://www.treasurydirect.gov/govt/reports/pd/mspd/2011/opds072011.pdf" target="_hplink">more than $14 trillion</a> in government debt in the first quarter of 2011. Canada has more than <a href="http://news.nationalpost.com/2011/03/21/graphic-50-years-of-canadian-debt/" target="_hplink">$563 billion</a>. That figure works out to 84 per cent of Canada's GDP, compared to 58.9 per cent for the U.S.
In the first quarter of 2011, the average Canadian had more than $3,500 in credit card debt, according to <a href="http://newsroom-en.transunion.ca/easyir/customrel.do?easyirid=8AD5A6701E126601&version=live&prid=762822&releasejsp=custom_144" target="_hplink">TransUnion Canada</a>. In the U.S., the average American consumer owes more than $4,200 in credit card debt.
As of June 2011, the median cost of a home in Canada was $372,000. Vancouver, Victoria and Toronto are some of the most expensive places in the country to buy a house. Prices in the U.S. vary more than they do in Canada. As of June, the median price of a home in the Northeast was $261,000, while the median price in the Midwest was $147,000. The median in the South was $159,100 and in the West, it was $240,400. The average price of a home <a href="http://news.bbc.co.uk/2/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm" target="_hplink">in the UK</a> is £232,628 as reported by their first quarter in 2011, which converts to around CAD $371,000.
In 2010, there were more than 1.5 million non-business bankruptcy filings in the U.S. In the same year, there were only 92,694 personal bankruptcies in Canada. That means there were 48 bankruptcies per 10,000 people in the U.S., and 28 bankruptcies per 10,000 in Canada.