Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector responsible for the majority of it.
Canada has never experienced private debt this high, nor has it ever led advanced economies in private debt accumulation. And while much attention has been paid to ever-higher mortgage debt for households, very little has been paid to the debt boom in the corporate sector. The net result of these related trends is setting Canada up for a crisis when this growth slows or even reverses itself — as it inevitably must.
So, what can we do about it? Study author and senior economist David Macdonald says that that weaning the country off private sector debt should be our primary public policy concern. He says we also need further study of corporate debt, and should consider a housing speculators’ tax to further reign in mortgage debt increases.
Do we have time to heed the warning signs? Find out more in the full report.