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Debt growth in Canada is slowing from the double-digit pace seen before the recession

And total borrowing, including mortgages, typically the biggest household loan, is slowing, major Canadian banks said recently in their quarterly reports.

The Bank of Canada’s trend-setting overnight lending rate is just 1 per cent. But with inflation running at 3.3 per cent, above the central bank’s ideal range, Carney is under pressure to start raising lending rates to dampen demand.

Total debt per consumer increased to $25,597 in the first three months of this year,

Among types of loans, TransUnion said credit card debt, usually the most expensive to carry, barely budged from a year ago, falling $25 to an average of $3,539.

In a sign some borrowers may already be struggling, the national credit card delinquency rate rose 11 per cent. The rate measures the ratio of consumers who take 90 days or more to pay their bill.

The average line of credit, the most popular loans for their low cost and high flexibility, rose 5.9 per cent to $33,762 compared to last year. However, total line of credit debt declined for the first time in five quarters.

One noticeable shift was the decreased use of lines of credit, Higgins said. The category is the largest among consumer loans, making up 41 per cent of the total, and even more in Ontario, at 57 per cent

The study found debt loads rose in all provinces, led by Quebec and Newfoundland and Labrador. British Columbians had the highest load at $36,649.

Lines of credit are the most popular form of consumer debt, excluding mortgages, accounting for more than 41 per cent of outstanding debt at the end of the first quarter. Debt on lines of credit stood at an average $33,981, up 5.9 per cent from $31,867 in the first quarter of 2010.

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The survey interviewed 2,014 people and had a margin of error of 2.2 per cent, 19 times out of 20.

Third of non-retired Canadians report not saving

Many Canadians are not aware of how the economic downturn has impacted their financial situation and continue to load up their credit cards and lines of credit

The report finds that 32 per cent of non-retired respondents said they were not devoting any funds toward saving, even for retirement, up from 25 per cent in 2007

Of those making under $35,000 a year, 49 per cent surveyed reported that their debt levels rose in the last three years. In comparison, 42 per cent of those making $35,000 to $75,000 a year reported their debt levels rose, while 38 per cent of those making over $75,000 annually reported an increase

Personal lines of credit expanded to a new high of $181 billion outstanding in April, an increase of 6.2 per cent year-to-date, and up 20.4 per cent from a year earlier. This type of debt has bloated from $100 billion five years ago and less than $50 billion at the start of the decade.

Personal loans from banks totalled $48.5 billion, up 8.1 per cent from a year earlier, and bank credit-card receivables were up 8.9 per cent at $51.5 billion.

consumer debt rose in all provinces

the trend still remains modest compared to the double-digit, pre-recession levels

Average credit card debt

sign of troubled credit health, the national credit card delinquency rate — the ratio of credit card accounts that are 90 days or more overdue — grew 11 per cent from the first quarter of 2010.

average borrower debt on auto loans was also up in the quarter — by 12.4 per cent to $16,189 from $14,402 in the first quarter of 2010

Lines of credit are the most popular form of consumer debt

more than 41 per cent of outstanding debt at the end of the first quarter

consumers should take care to rein in their borrowing

consumer spending slowed during the first quarter, to just 0.1 per cent growth

consumers are focused on consolidating debt after borrowing heavily during the recession

higher energy and particularly gasoline prices are taking a bigger bite out of household budgets, leaving less for other forms of expenditures

high levels of indebtedness are expected to weigh down purchases going forward

In 2010, that savings rate has dropped to 4.2 percent — about $2,500 per household.

the recession has shaken out the labour market. “We’re experiencing a gain in jobs, but people are now in jobs that paid less than what they did.

Mortgages account for about two-thirds of the $100,879 owed by the average household, or about $63,126 per household, with 55 per cent holding mortgages and 45 per cent mortgage-free. The other third is consumer debt, which includes credit cards and personal loans.

“The debt-to-income ratio is concerning … but recently, (mortgage) credit demand has slowed and consumer credit demand has slowed considerably as well. It’s now at less than 5 per cent, which is half of what we saw in the previous five years on average.”

Personal debt consolidation and restructuring expert Jim Ferguson said the most common reason people are getting into overbearing debt is the ease of availability of credit

Canadian debt levels, relative to income, are still meaningfully below peak U.S. levels, but that a further sizable increase would be worrisome.

“Household financial assets are also growing fast due to the strong stock market, which dampen concerns about the debt, but assets can vanish more quickly than debts.”

Overall household liabilities grew by 6.5 per cent from the same period a year ago levels.

Household net worth per capita increased from $178,200 in the third quarter to $181,700 in the fourth quarter.

The rate of growth in net worth, after rebounding from the recession, has stayed in a range of between five and six per cent. That compares with a pace of between nine to 10 per cent in the five years leading up to the recession.

"Once interest rates start to rise over the latter half of 2011, the debt-service ratio is expected to climb substantially."

Measuring all debt — government, business and family — national net worth edged up 0.3 per cent to $6.3 trillion in the fourth quarter, the slowest quarterly growth of the year.

Lines of credit are the largest category of consumer debt in the country accounting for 41% of all outstanding debt though delinquency rates are very low. Line of credit debt was up 5.9% in the quarter over last to an average of $33,981. When compared to the final quarter of 2010 however, line of credit borrowing is down for the first time in several years.

This may be “an early sign that Canadians are shifting to a more conservative and restrictive form of financing to manage their debt loads,”

record household debt levels have left this country vulnerable to economic shocks

the Canadian banks will report a slight increase in profit for the quarter as they contend with the impact of declining consumer borrowing, moderating capital markets activity and other headwinds.

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With domestic household debt levels hovering close to where they were in the United States prior to the financial crisis, many observers are warning that Canadians need to start paying down debt if the economy is remain on level footing

anadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction

Canadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction

growth in the overall home loan market "is continuing to be more robust,"

Canada's fourth-largest lender on Wednesday kicked off second-quarter bank earnings season with a 7.5% increase in profit on the back of lower provisions for bad loans

Canadians are doing a better job of managing their credit card debt which was down $25 on a year over year basis to an average of $3,539 at the end of the first quarter

irst quarter data shows a continued increase in the total debt per consumer, although the trend still remains modest compared to the double digit, pre-recession levels

Lines of credit continue to drive debt and are the largest contributor after mortgages, accounting for 41% of the outstanding debt in Canada at the end of the first. Delinquency longer than 90 days were .21%

In the near term, households are under pressure as rising food and energy costs cut into their budgets

“I will never, never do that again. I want to have the money up front before I buy something, because I don’t want to get into that trouble again,” said Ms. Thornton

the household debt service ratio – debt payments to disposable income – jumped to a three-year high of 7.8 per cent from 7.2 per cent

Kim Thornton, for example, is one fatigued consumer. The mother of four says her family ran up about $50,000 in debt in prior years on credit card spending

In the longer term, high debt levels could restrain spending for years

Canadians are getting the message about whittling down debt, and that is translating into fewer purchases of discretionary goods

reduced hours and leaner wages – a legacy from the recession – mean many families have less money with which to service their debt, he added

still net borrowers, meaning they borrow more than they save

consumer spending will not be the engine of economic growth in the coming quarters and the inevitable future rebalancing of monetary policy will be a shock to many households

some of the drop in household indebtedness is explained by strong income gains, not by debt repayment per se

sustainable personal growth is likely in a range of 4.0-4.5 per cent. Credit continues to grow at a pace that is two percentage points above that

the level of Canadian household debt — which in December officially surpassed those of our neighbours to the south — is unsustainable

total consumer debt load is reported to be about $1.5 trillion

Data released late last year suggested Canadians owed on average $112,000 — a figure that includes all kinds of debt, including mortgages — and a debt-to-income ratio of 150 per cent means they were spending $1,500 for every $1,000 in take-home pay

Factors that will moderate credit growth over the short term include spending fatigue, a soft landing in the housing market, stricter mortgage rules and Canadians preparing for the higher interest rates that are sure to come as the economy recovers.

Bank of Canada held its benchmark overnight rate steady at just 1 per cent, citing global uncertainty and the impact of the strong Canadian dollar, but said rates must eventually rise

Annual personal credit growth slowed to a year-over-year pace of 6.4 per cent in April, compared to an average 10.9 per cent in a period spanning 2004 to 2008

The moderation in credit growth has been evident in all measures of debt

The debt-service ratio, the interest households must pay on their debt each month as a share of personal disposable income, climbed to a two-year high of 7.6 per cent in [the first quarter of] 2011, despite still record low interest rates.

We will not give in to Opposition demands to impose

This reckless policy would lead to continuing deficits and higher taxes on all Canadians. It would stall our recovery, kill hundreds of thousands of jobs and set families back.

We need to keep protecting and creating jobs now

Keeping taxes low A key part of that foundation is low taxes.

Our tax cuts are also helping employers to invest, grow and create jobs.

Our government will take further action to encourage them to expand and create jobs.

The Hiring Credit for Small Business will provide a one-year EI break for some 525,000 Canadian small businesses

Expanding international trade Beyond this, we will promote new export opportunities for all Canadian businesses

We will provide greater financial security for Canadians, and practical help to make ends meet.