Canadian Housing Market Financial Analysis
Household Debt: Canada vs. U.S.
Canadian households' balance sheets compare favourably to US
• Canadian headline debt-to-income ratio is now 2% below the U.S. peak in 2008
。 Over the last 8 years, increases in the Canadian debt-to-income ratio have slowed vs 2002-10
。 Calculated on the same terms, Canada's debt-to-income is currently 167% vs 134% in the U.S.
• Canadian debt-to-assets ratio remains below U.S.
o U.S. households have incentive to pursue higher asset leverage in light of mortgage-interest deductibility
。 Debt is a stock concept, to be financed over one's lifetime. Income is a flow concept measuring
one single year's earnings. Debt should be compared to lifetime or permanent income, or assets
Ratio of total household debt-to-GDP remains lower in Canada than U.S.
o Calculated on a comparable basis, the ratio of household credit market debt is 100.4% in Canada vs 101.2% in the U.S.
Household Credit-Market
Debt to Disposable Income
Total Household Liabilities
As % of Total Assets
30
180
household credit liabilities
174.0
as % of disposable income
170
160
167.3
25
150
140
130
20
133.5
120
110
Adjusted Canadian*
15
100
Official Canadian
Official US
90
T
T
10
00 02 04 06 08 10
12 14 16 18
* Adjusted for US concepts and definitions..
Sources: Scotiabank Economics, BEA, Federal
Reserve Board, Statistics Canada.
household debt
as % of assets
T
T
Household Credit-Market
Debt to GDP
130
% of GDP
120
Original
US
110
100
US with
unincorporated
business debt
Canada
103.3
101.2
100.4
90
18.7
Canada*
80
74.9
Canada
17.4
70
Original
US
T
00 02 04 06 08 10 12 14 16 18
Sources: Scotiabank Economics, Federal
Reserve Board, Statistics Canada.
10
60
65
50
00 02 04 06 08 10 12 14 16 18
* Adjusted for US concepts and definitions.
Sources: Scotiabank Economics, BEA, Federal
Reserve Board, Statistics Canada.
Scotiabank®
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