Canadian households continue to carry the highest debt burden among G7 countries, leaving many families vulnerable to job losses, unexpected expenses and higher borrowing costs.

The seasonally adjusted amount of household credit market debt reached $3.25 trillion during the first quarter of 2026, according to Statistics Canada.

Household credit market debt rose to 179.6 per cent of disposable income, up 0.9 percentage points from the previous quarter. That means Canadian households owed nearly $1.80 for every dollar of income available after taxes and government transfers.

The ratio has now increased for six consecutive quarters, although it remains below its record high of about $1.86 for every dollar of disposable income reached in late 2021.

Canada’s household debt burden is the highest among G7 economies. International Monetary Fund research found Canadian household debt exceeded 100 per cent of gross domestic product and 170 per cent of disposable income, placing the country ahead of its major industrialized peers.

Statistics Canada has previously reported that household debt in Canada was more than 180 per cent of disposable income under internationally comparable measurements, compared with approximately 100 per cent in the United States and Germany. Differences in accounting methods mean international and domestic ratios are not always directly interchangeable.

Mortgages are the largest contributor to the country’s debt burden. Residential mortgages accounted for about 74 per cent of household credit liabilities at the end of 2024, according to the IMF.

High home prices have required many Canadians to take on larger mortgages, particularly in Ontario and British Columbia. The OECD has also identified mortgage borrowing as the main reason Canadian household debt remains among the highest in the developed world.

The cost of carrying that debt also remains elevated.

Canada’s household debt service ratio increased to 14.75 per cent in the first quarter of 2026, up from 14.68 per cent during the previous quarter. The measure represents the share of disposable income required to make obligated principal and interest payments.

In practical terms, nearly 15 cents of every dollar of household disposable income was being directed toward debt payments before other expenses such as food, utilities, transportation and property taxes were considered.

The Bank of Canada said Canadian households have generally remained resilient despite their high debt levels.

Mortgage arrears remain low and most borrowers renewing mortgages during the past year have managed higher payments.

However, the central bank warned that highly indebted households may have limited savings or financial flexibility to absorb a job loss or unexpected expense. About 12 per cent of outstanding mortgages are expected to renew during the coming year after being obtained at low fixed rates during the pandemic.

Those borrowers are expected to see their payments increase by an average of about 15 per cent.

The financial pressure is not distributed evenly. Households that purchased expensive homes near the peak of the housing market or have large mortgages compared with their incomes face greater risks than homeowners with significant equity and savings.

High household debt can also affect the broader economy. Families directing more income toward mortgages, credit cards and other loan payments have less money available for retail purchases, travel, restaurants and other discretionary spending.

The Bank of Canada said the greatest risk would be an economic downturn accompanied by significant job losses. A decline in income could make it more difficult for heavily indebted households to remain current on mortgage and consumer credit payments.