A renewed warning on Canadian household debt levels is coming from a research report written by an international management consulting firm.
The report, published by McKinsey & Company on Thursday, singled out Canada and six other countries with â€œpotential vulnerabilities in household debt.â€ In Canadaâ€™s case, household debt levels are higher than those that existed in the U.S. at the peak of the credit bubble, the report notes.
The data suggests a â€œpotential risk, but not an imminent crisis,â€ the report said.
â€œThere is no sign that there are a significant number of Canadian borrowers today having trouble repaying their debt. The risk comes when you look to the future,â€ said Susan Lund, partner at McKinsey Global Institute in Washington, D.C.
â€œIf the economy were to slow and unemployment started to rise, when people lose jobs, thatâ€™s when a mortgage that you could afford with a job suddenly becomes unaffordable. The other potential risk is if and when interest rates start to rise, that could create a much larger burden on households repaying debt.â€
So what does that mean for Calgary which already has an obscene amount of household mortgage debt? Â I hate to say it but what does it mean for Saskatchewan which has a high debt to income level. Â