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Canada is a world leader in debt. This is no secret. The Bank of Canada has identified household debt as one of the biggest risks to our economy, and a number of international bodies have also raised red flags.

Now a new economic report for the Macdonald-Laurier Institute argues that Canada’s combination of weak economic growth, a reliance on consumer and government spending and a rising debt load makes it particularly vulnerable to a global downturn.

How bad is our debt? Total credit for the non-financial sector in Canada as a proportion of GDP was 305.7% in the second quarter of 2019, according to the Bank for International Settlements. That’s higher than the average of Canada’s economic peers at 272.3%. Since 2008, that debt to GDP ratio has risen 32.5%, compared with an average rise of 13.8% in other advanced economies.

Why is it so high? The study’s author Philip Cross says one of the main reasons is ironically because our banking system and “borrowing reputation” escaped largely unscathed from the Financial Crisis. As a result debt levels never fell in Canada as they did in other countries, while historically low interest rates led to a steady increase in borrowing.