Statistics Canada reports a decline in the household debt-to-disposable income ratio for the third quarter of 2024, marking the sixth consecutive quarter of improvement. This shift reflects an increase in disposable income that outpaced the growth of household debt.
Key Figures
The household credit market debt as a proportion of disposable income fell to 173.1% in Q3, down from 175.3% in Q2. This means Canadians owed $1.73 in credit market debt for every dollar of disposable income.
Additionally, the household debt service ratio — the proportion of disposable income allocated to mandatory debt payments, including principal and interest — decreased to 14.72% in Q3 from 14.98% in Q2. While debt payments rose slightly by 0.2%, disposable income increased by a notable 2%, driving the overall improvement.
Economic Context
The continued decline in the debt-to-income ratio signals progress in Canadians’ financial resilience. However, with over 1 million Canadian mortgages set for renewal in 2025 and persistent cost-of-living challenges, the trend remains under scrutiny as households adapt to shifting economic conditions.
