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September 5, 2017

The following information is derived from Statistics Canada information as reported on CBC online news media.

  • Canadians owe about $1.92 trillion in consumer debt.
  • Canadians, on average, owe 1.65 times annual, gross, income in debt.
  • There are approximately 36 million people living in Canada.
  • Statistics Canada reports that there about 13 million households.
  • Most Canadian families (70%) are supported by two incomes.

Therefore, if $1.92 trillion (debt) is divided by 36 million (people) every single man woman and child in Canada would owe about $53,333 in some form of consumer debt.  Assuming that figure represented 1.65 times their gross annual income they would each earn a gross amount of $32,323 per year.

Clearly not everyone, especially children, earns income and some people.  Statistics Canada reported that there are about 13 million households in Canada.  They have also said that 70% of families are supported by two incomes.  So we can assume that there are 18.2 million people contributing to those two income households and a remainder 3.9 million income earners supporting the rest of the households.

Assuming that the total consuer debt is evenly distributed across that population (which it is definitely not) that would mean that each income earner is in debt to the tune of $86,887.  Therefore, each income earner must logically be earning $52,653 per year (which is significantly more than the reported Statistics Canada median income).

It is common knowledge that minimum monthly payments on credit cards and lines of credit were at one time calculated at a mere 3% of the outstanding balance payable each month, however, more recently those minimums have been pushed downward to inhibit default.  Using the 3% level of payments we may estimate that each debtor (Canadian income earner) would need to come up with about $2,600 per month of after tax income just to service their debt.

By using the CRA online payroll calculator, we have estimated that after meeting payment obligations each income earner would be left with about $758 per month for groceries, clothing, and all the rest of their necessary living expenses.  It should be obvious that this calculation requires that the income earner delve ever deeper into debt just in order to live.  Keep in mind that even if the income earner is in the top1.5% of Canadian income earners and making $150,000 per year the percentages work out exactly the same requiring them to pay $7,481 of net income to service their $247,500 worth of debts.

If you spot a miscalculation somewhere perhaps you would be kind enough to email us at to let us know.  Assuming the validity and accuracy of the information it seems that we should be asking our politicians “who created the rules that allowed the banks to get away with this?”

If you are experiencing debt challenges that you cannot resolve on your own remember that we can help.  All initial consultations are free and there is no obligation for you to follow through on our advice.