Earnings & Dividend Growth Presentation
HOUSEHOLD DEBT: CANADA vs U.S.
Canadian households balance sheets compare favourably to those of their southern neighours
In comparable terms, Canadian debt-to-income ratio is now 5 ppts below where it peaked
in the U.S.
In the last 7 years, increases in Canadian debt-to-income ratio have slowed vs 2002-10
。 Calculated on the same terms, Canada's debt-to-income is currently 162% vs 134% in the U.S.
Canadian debt-to-assets ratio remains below U.S.
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.
。 Calculated on a comparable basis, the ratio of household credit market debt is 98.1% in Canada vs. 102.5% in the U.S.
Household Credit Market
Total Household Liabilities
Household Credit-Market
Debt to Disposable Income
As % of Total Assets
180
30
household credit liabilities
167.9
household debt
as % of disposable income
as % of assets
160
162.2
25
140
120
100
80
134.3
20
Adjusted Canadian*
15
Official Canadian
Official US
60
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
10
* Adjusted for US concepts and definitions.
Sources: Scotiabank Economics, BEA, Federal
Reserve Board, Statistics Canada.
Debt to GDP
130
% of GDP
120
110
US
US with
unincorporated
business debt
102.5
100
Original
Canada
102.3
98.1
00
Canada*
90
80
18.7
Canada
70
16.7
70
60
50
Original 75.7
US
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Sources: Scotiabank Economics, Statistics
Canada, Federal Reserve Board.
90 92 94 96 98 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 51View entire presentation