September 5, 2017

Are you comfortable living with debt? According to Trans Union the average Canadian consumer’s debt load is continuing to increase. So it would appear that being indentured is not only a way of life for Canadians but one that we have become very accustomed to.

Statistics get very difficult to interpret as data is often confused, confusing or just unknown, but let’s consider some reported information.

According to a February 26, 2014 article in the Financial Post, Canadian consumers owed $1.4 trillion in non-mortgage debt a number that corresponds closely with the value of Canadian “bank mortgage” debt, also approximately $1.4 trillion.  The value of “non-bank” mortgage debt can be estimated to approximate a similar value as bank issued mortgages.

The number could be determined by comparing reports from the Canadian Banker’s Association (“CBA”) with those from Statistics Canada.  The CBA says that after deducting “bank mortgage” debt Canadians own 60% of the value of their homes while Stats Can says Canadians own less than 20% of the value of their homes.  The difference, logically, must be made up of unreported private mortgages.  Since the spread is the same it seems reasonable to assume that private mortgage debt is of a very similar value.

Putting all that data together suggests that the average Canadian owes a total of $123,529.00 – a number calculated by dividing the total value of all consumer debt by 34 million Canadians.  If we also assume that the average Canadian family consists of four people each family would owe $494,118.00 in consumer debt.

According to Wikipedia, in 2011, Canadian Banks had assets of approximately $3.3 trillion.  Assets, of course, include “receivables”.  That information ties in well with the other data reported above.  The cost of servicing the debt would be approximately $12,353.00 per family per year providing lenders with annual revenues of about $105 billion which is consistent with recent revenue reports from banks such as RBC reporting profits of $2.2 billion in one quarter alone and revenue for 2013 of $30 billion.