Statistics Canada released figures showing that the net worth per household dropped by $4,600 (Canadian) last quarter mostly because of declines in the value of equities and pension assets. In spite of relatively hard times Canadians have continued borrowing. Over a year the per capita debt has risen by $2,200 dollars to a total of $46,100. The total is a humongous 1 trillion dollars in mortgages plus another 448 billion in consumer credit.
The governor of the Bank of Canada warned Canadians they must ease up on spending as the level of debt averages over 150 per cent of income as the most recent Statistics Canada figures show. Net household worth has been declining as debt has been increasing. In the third quarter of this year net household worth dropped 2.1 per cent. This is the second consecutive quarter in which net household worth has declined.
Government debt has also been rising. In the second quarter government net debt was 46.3 of GDP but this last quarter was 46.9 per cent of GDP. This is still quite moderate compared to many countries. Canada's problems may be more with consumer debt. Consumers saddled with large debts in a sluggish or declining economy are not a recipe for growth or even social peace. For more see this article.