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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

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

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

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

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

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.

The government's attempt to continue economic growth by borrowing has failed. Canada's economy is going nowhere and we are farther behind because of government debt. The future does not look much better for Canada's economy.

Canada's net debt had grown to $582 billion, up from $516 billion two years earlier.

Government spending cannot continue to increase especially when it is financed by debt. The recession was started by economies overloaded with debt. Rather than deal with the imbalances government decided to increase spending "grow the economy" and create more debt. Now we are in a predicament that there are no tools left for governments to throw at the economic problems.

government borrowing huge amounts of money to bolster the economy

Unemployment, now at 7.6 per cent, will remain considerably higher between now and 2015

Sluggish U.S. growth combined with the Canadian dollar remaining above parity will subdue near-term growth in the Canadian economy and restrain the decline in the unemployment rate.”

Ottawa set a record $55.6 billion deficit in 2009-10, when the recession hit hardest, but has improved that position by between $15 and $20 billion in one year.

"However, based on the results to date, the final 2010-11 deficit is expected to be lower than the $40.5 billion as projected in the March 22 budget."

History has shown those adjustments can amount to billions of dollars in additional expenditures.

During the election campaign, the Conservatives pledged they would balance the budget in four years -- one year earlier than planned -- by finding an additional $4 billion in savings from operations.

The department said $17 billion, or about half, of last year's deficit was due the stimulus package.

In April, the International Monetary Fund pegged Canada's combined federal-provincial fiscal deficit at 4.1 per cent of gross domestic product, lower than the U.S. (10.5 per cent) and the United Kingdom (8.1 per cent).

It also features a bundle of crime bills that would be passed in the first 100 days of Parliament

The five main priorities of the campaign platform are jobs creation, supporting families, eliminating the deficit, getting tough on crime, and investing in the North.

The steep decline in the 12-month moving sum that was produced by the recession finally turned around in early 2010, but the rebound lasted only a few months.

The graph also makes it clear that the trend to deficit began in early 2008, several months before the recession began.

The federal government’s decision to cut the GST would have produced a deficit even if the economy had remained stable.