June 12, 2025
RED FM News Desk
Canadians are carrying more debt relative to their income, as Statistics Canada reports that the household credit market debt to disposable income ratio increased in the first quarter of 2025. This rise indicates that debt accumulation outpaced income growth during this period.
The agency states that, on a seasonally adjusted basis, this ratio climbed to 173.9 percent, up from 173.5 percent in the fourth quarter of 2024. To put it another way, for every dollar of household disposable income in the first quarter, Canadians held $1.74 in credit market debt.
Despite the increase in the overall debt-to-income ratio, the household debt service ratio remained stable at 14.40 percent for the quarter. This ratio measures the proportion of disposable income dedicated to principal and interest payments on credit market debt.
These findings emerge as the pace of household credit market borrowing slowed down. In the first three months of the year, borrowing reached a seasonally adjusted $34.5 billion, a decrease from the $41.6 billion recorded in the fourth quarter of 2024.
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