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Canada’s household debt, which already exceeds the size of the size of the country’s economy and leads G7 nations, is seeing even greater increases as interest rates rise, according to a report published by the Canada Mortgage and Housing Corp.
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The May 23 report said concerns about fallout from high household debt, around three-quarters of which comes from mortgages, are most pressing for those with lower incomes because they also tend to be more highly indebted. So not only do they rely more on having jobs to service the debt, but they are now “facing real pressure” from higher housing costs.
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“We see early warning signs that more and more consumers are getting into financial difficulties,” the report warned, adding that it will soon publish a more detailed report on these troubles.
We see early warning signs that more and more consumers are getting into financial difficulties
CMHC report
“Household debt in Canada has been rising inexorably…. Unfortunately, (this) makes the economy vulnerable to any global economic crisis.”
The housing authority said there are concerns Canadians’ high debt levels could be exacerbated over the longer term, depending on the trajectory of interest rates.
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