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We all know about Canada’s ballooning household debt. Hardly a day goes by without a headline warning about overstretched Canadians wallets, and policymakers have long been racking their brains about ways to rein-in families’ debt binge.

READ MORE: As rates rise, Canadians in debt face risk ‘beyond historical experience’: PBO

But another type of private-sector debt has ballooned — and with hardly anyone taking notice.

Since 2011, Canada has racked up an additional $1 trillion to its non-government debt, and most of the increase came from Canadian companies, not households, according to a new report by the Canadian Centre for Policy Alternatives (CCPA). Corporate debt increased $671 billion (in 2016 dollars) since then.

As a result, Canada now leads advanced economies in private-debt accumulation, which is one of the best predictor of economic crises, according to CCPA economist David Macdonald, who authored the report.

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The risk for both Canadian households and companies is that the price what they bought using credit will start to decline, leaving them with a debt load that’s bigger than the assets they purchased, Macdonald told Global News.

“The priority then becomes to reduce your debt,” he said. For everyday Canadians, that will probably mean trimming back on expenses, which would hurt growth by lowering aggregate consumer spending.

Corporations could decide to pull back on hiring or cut jobs, cancel planned expansions, or give up on new spending on machinery and equipment, which would also hit GDP, he noted.

Together, the two could deliver a powerful blow to the economy.

WATCH: Rising debt, sizzling housing markets leave Canada more vulnerable

3:10 Rising debt, sizzling housing markets leave Canada more vulnerable Rising debt, sizzling housing markets leave Canada more vulnerable

Companies are also using debt to buy real estate

In principle, there’s nothing wrong with companies carrying some debt, Macdonald told Global News. But one has to look at what they’re using that debt for, he added.

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In Canada’s case, Macdonald’s analysis suggests that corporations have been using much of their new debt to purchase real estate, much like regular Canadians.

READ MORE: Canadians have more debt than ever, but fewer are going bankrupt. Why?

Over the past five years, the value of commercial real estate held by Canadian companies went up by $269 billion and that of land by $226 billion. While some of that likely reflects real estate price increases, company balance sheets suggest corporations have been loading up on commercial property.

Debt has also fuelled Canada’s recent boom in mergers and acquisitions, with the value of equity and investment shares rose $348 billion over the past five years, according to Macdonald.

“Mergers and acquisitions, like rapidly increasing house prices, are using debt as a means of asset speculation, rather than for long-term productivity growth,” notes the report.

READ MORE: Rising interest rates could cost the average Canadian $130 a month more in debt repayments

It would be a different story if Canadian corporations had used debt to invest in things like new machinery and equipment, which generally drives up productivity and, in aggregate, creates sustainable long-term growth, according to Macdonald.

Instead, those types of investments rose by just $60 billion over the same period, according to the report.

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Whether you look at household or the corporate sector, “Canada’s economic growth has become addicted to private sector debt,” writes Macdonald.

Weaning ourselves from it could be painful, he told Global News.