New data from Statistics Canada show that Canadians are sliding deeper into debt.

The national balance sheet and financial flow accounts released Monday, found the credit market debt to disposable income ratio climbed to 181.66 in the second quarter, which is up from 179.71 the previous quarter.

This means the average Canadian owed almost $1.82 for every dollar of disposable income.



Statistics Canada reported overall household sector net worth fell $990.1 billion, or 6.1 per cent, to $15.2 trillion.

This marked the largest decline on record as individuals faced a “trifecta of market challenges,” with weaker housing, equity and bond markets weighing on Canadians’ wallets.

The total value of households’ financial assets fell by a record $530.6 billion.



Credit market borrowing accelerated from the first quarter as demand for mortgages remained high.

Canadians added “a near record $56.3 billion of debt in the second quarter” and mortgages were the largest contributor, with demand of $48.7 billion.

Statistics Canada also found fewer Canadians were leaning towards variable rate borrowing for their mortgage in the current interest rate environment.

“Variable rate borrowing represented over half (51.1 per cent) of new funds advanced versus fixed rate alternatives in the second quarter, but by June this share was trending lower,” Statistics Canada outlined in the report.

This drop in variable rate borrowing came right after the Bank of Canada delivered another interest rate hike and warned it may act “more forcefully” to get inflation under control. Since the June hike, the central bank has increased interest rates another two times.

By the end of the second quarter, variable rate mortgages represented about a third (32.5 per cent) of outstanding mortgage debt, which is up from 29.8 per cent in the first quarter.