BMO report: Canadians' household debt rises 6 percent

The research reveals that household debt has increased in each region across Canada, except for the Prairies and Ontario. Alberta remains the province with the highest household debt, $48,698 above the national average. Alberta and BC are above the national average, while the other provinces are below.

Other regional differences include:

• Albertans have nearly twice the average household debt than Ontarians ($124,838 vs. $67,507, respectively).
• Atlantic Canadians took on more than $16,000 of household debt this year compared to 2013.
• British Columbians also took on more debt, $20,745 more this year than last.
• Those in the Prairies reduced their debt by $13,000 from last year.

BMO Capital Markets Senior Economist Sal Guatieri notes that the booming economy of Alberta, particularly Calgary, has made the province an outlier compared to other regions. “Part of the reason household debt in Alberta is so much higher than in other provinces may be due to rapidly rising house prices, which have caused home buyers to take on larger mortgages.”

The BMO Debt Report also reveals the type of debt Canadians have in 2014 compared to last year:

• Four in ten (43 percent) Canadians hold mortgage debt, an increase of 13 percent year-over-year.
• More than half of Canadians have a credit card balance, but the number of households has dropped to 52 percent this year from 56 percent.
• Student loans have remained stable, with 15 percent of Canadian households reporting this type of debt.

The rising share of households with a mortgage is partly driven by the active participation of first-time buyers, mainly young Canadians, noted Mr. Guatieri.