Scotiabank Earnings and Strategic Update
Household Debt: Canada vs. U.S.
Canadian households' balance sheets compare favourably to US
Canadian debt-to-income ratio is now 2.2 percentage points 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
o 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 98.6% in Canada vs 101.1% in the U.S.
Household Credit Market
Debt to Disposable Income
Total Household Liabilities
As % of Total Assets
Household Credit Market
Debt to GDP
200
household credit liabilities
as % of disposable income
180
173.8
160
140
120
100
88
80
60
30
25
166.8
134.0
20
20
Adjusted Canadian*
15
Official Canadian
Official US
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.
10
household debt
as % of assets
US
130
% of GDP
120
110
US with
unincorporated
business debt
100
Original
Canada
102.9
101.1
98.6
90
Canada*
17.8
80
Canada
70
16.8
66
60
Original
US
74.9
T
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Sources: Scotiabank Economics, Federal
Reserve Board, Statistics Canada.
50
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®
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