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Cuts to the Bank of Canada overnight lending rate appear to be the driver behind consumers ratcheting up their debt, which Statistics Canada said Thursday reached record levels in the four quarter of 2014.

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Few financial issues create as much angst in this country as household debt. So how bad is it?





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Household debt to disposable income was 163.3% at the end of the last quarter but the increase comes as household net worth increased 7.5%.

Doug Porter, chief economist with Bank of Montreal, predicts the debt to income number will push higher in the coming months albeit not as much in Alberta where low oil prices continue to threaten the economy.

“It’s partly fuelled by the Bank of Canada’s rate cut and party fuelled by the strength in the Toronto and Vancouver housing market,” said Mr. Porter.

New data from the Teranet-National Bank House Price Index, also released Thursday, show prices continue to increase in those two cities, with Vancouver existing home prices up 5.7% in February from a year ago and Toronto up 7.3% during the same period.