Canada may find itself in the unexpected position of a world leader – a leader in global debt.

Canada’s Fourth Quarter economic growth was 1.7% following positive signs of growth earlier in the year. This growth, however modest, is attributable to easy credit and the increased consumer spending. At this time, Canadian households are facing one the largest indebtedness when compared to most other countries. For every $1.00 of income, consumers owe $1.68. This is the highest income to debt ratio in the world. For low-income Canadian households, the $1.00 disposable income to $3.33 debt ratio is even worst.

Canada, along with other nations, especially emerging markets are carrying records levels of consumer debts, may be facing a serious crash as further growth becomes unsustainable.

Canada combined deficit rose to $18.1 billion in 2016, from $12.9 billion in the previous year. Higher debts and increased spending are causing serious concerns that the Canadian economy is on an unsustainable economic path.

A considerable portion of Canada’s future economic growth has been predicated on strengthening and improving the country’s infrastructure. However, Prime Minister Trudeau’s policies are destined to strangle potential economic growth by shifting C$7.2 billion allocated to infrastructure improvements to government programs such as gender equality hiring opportunities. According to the Conference Board of Canada’s Craig Alexander

This isn’t a budget that’s about growth, as much as it’s about equality and breaking down barriers to opportunity.

Canada appears to be stunting its own economic growth as a matter of policy.

Three major infrastructure projects, The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and possibly the Energy East pipeline ($15.7 billion) would have been instrumental in guaranteeing economic growth for decades to come. However, these have been stymied in favor of Trudeau’s economic egalitarian vision. As a result, investors have been abandoning certain projects. The last time Canada’s saw such heavy-handed government interference in its economy was during the presidency of Trudeau’s father, Pierre Trudeau.

The fate of the Energy East pipeline is still uncertain and may be next in line to be scuttled. The reason for this is that the National Energy Board has decided to continue and widen its studies on the environmental impact of the entire oil industry, leaving the future of the TransCanada Keystone XL project very uncertain. With 100,000 jobs at stake, this has even Trudeau’s liberal Alberta government worried as they accuse the NEB of serious and unprecedented overreach. Politicians, not market consequences, are determining Canada’s energy future. And that does not bode well for Canada.

Canada’s shaky economy is also suffering from a loss of 88,000 jobs due to mandated minimum wage increases. Employers who have been unable to meet the new wage demands have been forced to let workers go. The wage increases could foreshadow impending inflation, which would likely lead to high prices. During the First Quarter of 2018, the job market was still relatively strong, but the full effects of the minimum wage hike are still unknown.

If, as anticipated, consumer spending will see a decline in the coming year, this will contribute to the slow economic growth facing Canada. Still, housing costs are relatively low when compared to the rest of the world, but prices have been rising at a rate of 13 percent in 2016 and 10.8% in 2017. A staggering forty percent of Canadians are homeowners. Trudeau’s immigration plan is to include 60 percent of immigrants who are educated, family-oriented and able to find employment. This move is seen as favorable for the housing market, although an increase in mortgages can lead to more economic problems.

With more homebuyers in the market for bigger houses and bigger mortgages, Canada may be approaching a housing bubble similar to the US in 2007. Mortgage debt already comprises 70 percent of Canada’s GDP, a number close what the US was seeing before the housing market tanked catastrophically. Unparalleled household debt is proving to be Canada’s greatest vulnerability and Prime Minister Trudeau’s biggest headache. The high debt to disposable income ratio is increasing, and there are few signs of a reversal of this ominous trend. Even with stringent banking mortgage rules in place, private mortgage lenders are cutting sharply into the mortgage business.

Canada appears to be at a crossroad, and its greatest challenge in 2018 is uncertainty. An uncertain household and government debt level, coupled with higher minimum wages and laid-off workers, could signal a historic crashing point. With immigration plans still uncertain and awaiting finalization, the housing market will remain unstable and end up bringing on a disastrous high level of questionable mortgage lending.

Is there hope for Canada? Perhaps. While Trudeau is making all the right liberal noises to cheer social justice warriors and bring economists to tears, thus far, he’s been long on words and short on action. Little has been done to implement Trudeau’s more potentially ruinous policies, and much of his time seems to be spent in photo opportunities which very well might be Trudeau’s most surprising and best possible legacy.