Over the past few years, people have found themselves with increasing debt as they attempt to claw their way out of an expensive pandemic with inflation on the rise.
Because of all the contributing factors, consumer debt across the country has been on the rise and according to a report by Savvy New Canadians, a personal financial information resource, Victoria has the most debt on a per capita level of any major Canadian city.
To understand why, first the Canadian debt landscape must be understood, especially how debt levels are linked to the housing crisis that impacts some cities more than others.
According to the Savvy New Canadians economists, in 2019, total Canadian consumer debt was at $1.99 trillion, and in 2023, that figure has risen by 17.7% to a staggering $2.42 trillion.
On average, most Canadians have over $65,000 in personal debt—most of the debt we owe is in mortgages.
In total, mortgages and home equity lines of credit (HELOCs) account for over 83%. Between 2019 and 2023, mortgage debt has risen by 22.9%
The current housing market is to blame for the uptick in mortgage debts as population increases at an unprecedented rate and housing prices rise causing a stark unbalancing of supply versus demand.
Of Canadians’ total debt composition, only 4.5% is attributed to credit card usage, 3.2% is in auto loans and 2.3% is in lines of credit.
According to Savvy New Canadians, Victoria ranks second in consumer debt per capita.
In Victoria, the total consumer debt is sitting at over $28.6 billion. This figure has risen by around 14%, or $4 billion over the past five years.
The level of consumer debt per capita is $305,365 according to Savvy New Canadians’ report.
Vancouver came in first, as housing costs the highest in the nation there, with a total consumer debt of nearly $239.9 billion.
Consumer debt per capita in Vancouver is $360,683— around $55,000 more than Victoria’s total debt per capita.
Coming in third is Toronto, with around $524 billion in total consumer debt; however, they owe only $187,350 in debt per capita.
Victoria Buzz reports monthly on rent reports that detail the average cost of renting a home and the top three consumer debt per capita are exactly in line with the top five most expensive sites to rent in.
To purchase a home, Vancouver, Victoria and Toronto are also among the most expensive cities to live in Canada.
This report from Savvy New Canadians shows how debt and housing are unequivocally linked. To lower debt, housing must be cheaper and for that to happen there must be more homes built.
