Date Posted: January 23, 2018
The Financial Accountability Office of Ontario has released their report detailing their findings on the Ontario household debt load.
Low interest rates have sustained economic growth in the province by boosting consumer spending and have increased the amount of activity in the housing markets. This, conversely, has also added to the significant increase in consumer debt. These higher debt loads are even more impactful on lower income households, who in turn spend nearly a third of their disposable income on debt repayments.
The FAO is noting a significantly faster increase in debt compared to increases in disposable income. As reported, Ontario has outpaced the rest of Canada for which household debt represents 171 per cent of disposable income as of 2016. In other words Ontario households owed on average $1.71 for every dollar of income.
Looking to review your own budget? The Government of Canada has some great tools to help you analyze your own financial picture.