Where does the money go? Increasing reliance on household debt in Canada (2007)

A long period of economic prosperity in the 1990s and early 2000s may have lulled household awareness of risks associated with debt run up. Our economic research provides insights on the level of household debt and perils associated with it as they were on the brink of the most recent recession.

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Where Does the Money Go: The Increasing Reliance on Household Debt in Canada will help you understand households’ financial circumstances and their perspectives on changing levels of indebtedness and wealth shaped by a 16-year recession-free economy.


  • household debt has been steadily increasing over the past two decades; however, the overall financial situation of the household sector does not appear to be distressful
  • moderate-income households are more prone to debt increase
  • consumption remains the primary cause of the rising debt levels
  • households’ savings rate has declined while the pool of Canadians that need to accumulate retirement savings has been on the rise
  • few households are aware of their vulnerability to economic shocks
Our economic research details these trends. We also highlight options that policy makers may consider in order to ensure viability of the financial system while maintaining strong levels of household spending.


  • improving financial literacy and financial capability of Canadians
  • encouraging employers to include pension savings in their recruitment and retention strategies
  • encouraging non-pension household savings