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

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

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.

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.

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

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

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

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

still at historic lows, moderate raises in mortgage rates will impact carrying costs negatively, thus slightly subduing housing demand

Average resale prices are expected to rise by a brisk 11.5 per cent to $340,000 this year, but the growth rate will slow significantly in 2012, to 2.9 per cent

that segment falling 20.1 per cent to 1,975 units

5,950 total housing starts forecast for 2011, up 2.3 per cent from the previous year

single-detached market is anticipated to be the hardest-hit

result of an ongoing shift towards more affordable housing types

New home construction is also expected to cool down this year

first-time homebuyers and downsizing empty-nesters at the forefront of Ottawa's housing market

raising the popularity of more affordable housing types such as condominium apartments, townhouses and semi-detached homes

soaring gas prices and lengthening commute times will push up interest in homes in the core

Elsewhere in the country

MLS sales, meanwhile, are expected to be between 429,500 and 480,000 units, with 2012 sales anticipated to be in the range of 410,000 to 511,900 units

slowdown affecting both single-detached homes and multi-family housing