Canada sees record fall of household debt-to-income ratio

Ottawa, Sep 12 (SocialNews.XYZ) Canada's household debt-to-income ratio fell to 158.2 per cent in the second quarter this year from the previous quarter's 175.4 per cent, the lowest since 2010, official figures revealed.

Statistics Canada said the figures published on Friday meant that Canadian households owed C$1.58 for every dollar they spent as of the end of June, reports Xinhua news agency.

Canadians owed C$2.3 trillion at the end of June, which consisted of C$1.5 trillion worth of mortgages, and C$779.4 billion worth of consumer debt such as that from credit cards.

The fall of household debt-to-income ratio came after expenditures decreased and Canadian government income transfers during Covid-19 and mortgage deferrals alongside record low-interest rates have provided financial relief to many during the pandemic, particularly those who lost work during nationwide business shutdowns and stay-at-home orders.

Government transfers and reduced spending pushed household savings to an unprecedented level, enabling households to shore up their deposit accounts while simultaneously reducing their debt, said Statistics Canada.

Government aid pushed household disposable income up by 10.8 per cent while spending dropped by 13.7 per cent.

Source: IANS