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Households now owe more than Canada’s entire GDP, housing agency warns

Households in other countries are paying down debt, but that’s not the case in Canada

Canadian households are more in debt than those in any other G7 country, and the amount they owe is now more than the value of the country’s entire economy.

That was one of the main takeaways of a new report from Canada’s housing agency, the Canada Mortgage and Housing Corporation, which backstops much of the country’s housing market via mortgage insurance.

In a report published Tuesday, the CMHC’s deputy chief economist Aled ab Iorwerth said Canada’s economy is more at risk to whatever crises may arise because of how much debt Canadian households have racked up.

“Canada’s very high levels of household debt — the highest in the G7 — makes the economy vulnerable to any global economic crisis,” he said. “When many households in an economy are heavily indebted, the situation can quickly deteriorate, such as what was witnessed in the U.S. in 2007 and 2008.” …[Read More]