A reduction of 185% is recorded in the debt-to-disposable-income ratio

There has been a reduction in debt levels in the first quarter of this year in comparison with the fourth
quarter of last year, according to Statistics Canada. This is likely due to the fact that incomes have been
growing faster than debt, indicating that Canadians are managing their finances better.

According to a report from the agency, on a seasonally adjusted basis, household credit market debt (i.e.
debts such as credit card, car, and mortgage loans) as a proportion of household disposable income has
fallen to 182.5%. This is lower than the record 185% recorded in the previous quarter.

1. There was approximately $1.83 of credit market debt for every dollar of disposable income for
households in the first quarter.

2. While household credit market debt increased by two percent, household disposable income
gained three and a half percent, resulting in a decrease in consumer debt.

3. Nearly two trillion dollars of debt came from mortgages, while nearly seven hundred billion
dollars came from non-mortgage loans.

As measured by the sum of obligatory principal and interest payments on credit market debt divided by
household disposable income, the household debt service ratio was 13.48 percent in the first quarter,
compared with 13.72 percent in the fourth quarter.