Article content

OTTAWA — The threat increasing household debt presents to Canada’s economy — and the country’s financial system, in particular — is continuing to grow, and at an ever-worrying pace.

The rising risks to heavily-indebted borrowers, those who have taken advantage of ultra-low interest rates following the 2008-09 recession, would be an economic collapse and a jump in unemployment, accompanied by a sudden and deep shock to the housing market — leaving many Canadians unable to meet their mortgage payments.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Bank of Canada deputy governor raises red flag on rising household debt, but says system is ‘resilient’ Back to video

It is a scenario that has concerned the Bank of Canada since the last global downturn, one that policymakers believe is still threatening — but remains manageable.

According to Lawrence Schembri, central bank deputy governor, monetary officials are working to “connect the dots” between the financial system and the economy to help better foresee signs of these increased risks to indebted households.