Concerns by Canada’s top banker over household debt levels is not a concern for higher-income Canadians.
On Monday, Mark Carney, governor of the Bank of Canada, reiterated his concerns that Canadian household debt is rising faster than household income with debt levels now above those of U.S. households.
A PwC consumer lending survey, however, found 67% of Canadians with household incomes of $100,000 or more remain comfortable with their existing debt levels. Even with relatively high consumer debt levels, 78% of respondents said they think they have the capacity to borrow more.
Nevertheless, households seem to be taking Carney’s warnings to heart. About 64% said they plan on decreasing their debt over the next 12 months, more out of prudence than fear. Only 9% said they were cutting their debt out of fear of losing their job.
Debt reduction is most likely to impact major household purchases. To reduce their debt, households were willing to delay purchasing a new car (64%), new electronics (59%) or purchase a new or larger home (56%).