Personal debt levels are high: CICA

Three-quarters of executive chartered accountants believe the high level of personal debt among Canadians is hurting the economy, finds the Canadian Institute of Chartered Accountants (CICA) Business Monitor.

And more than half (55%) also view high debt levels as a threat to future demand for products or services at their firms.

Read: Canada’s economic growth curbed: RBC

“Executive CAs understand that at some point interest rates will rise,” says Nicholas Cheung, a director with CICA. “When that happens, many Canadians could be challenged to keep up with mortgage or debt payments and this would greatly impact their ability to purchase goods or services.”

Statistics Canada states for every dollar in disposable income a Canadian household earns, it owes $1.65.

But there is some good news. More than one-third agree Canadians are already focused on reducing personal debt, while 50% believe consumers plan to do so this year.

Read: Answer client questions about Canada’s economy

“While stating intentions to reduce debt is important, it is critical Canadians follow through and take action,” explains Cheung. “Only time will tell if personal debt levels drop in the months ahead.”

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