OTTAWA - The ratio of how much Canadians owe compared with how much they earn improved in the first quarter for the first time since steadily worsening through most of last year.
Statistics Canada said Friday that ratio of household debt to disposable income edged down 163.3 per cent for the first three months of the year from 163.6 per cent at the end of last year.
That means households owed about $1.63 in consumer credit, mortgage, and non-mortgage loans for every dollar of disposable income.
The slight improvement came as disposable income growth outpaced borrowing by rising 0.9 per cent compared with 0.7 per cent for household credit market debt.
Total household credit market debt reached $1.841 trillion at the end of the first quarter, up 0.7 per cent from the previous quarter. Consumer credit debt was $519.5 billion, while mortgage debt stood at $1.197 trillion.
Low interest rates have made it easier for Canadians to borrow, contributing to the rise in debt in recent years. However, many have raised concerns about what will happen when interest rates and the cost of borrowing start to rise again.
Consumer debt has been cited as a key risk to the Canadian economy by the Bank of Canada and others in recent months.
Meanwhile, Statistics Canada said household net worth rose 3.4 per cent in the first quarter, boosted by gains in real estate and financial assets such as mutual funds and pension assets.
Non-financial assets, primarily real estate, rose 1.2 per cent while net financial assets were up 6.2 per cent.
Household net worth rose 3.2 per cent to $241,800 per capita.
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