Canadians are among the most indebted in the world

Canada ranks third in the world for debt among its citizens, according to a new study by Desjardins. They face historic increases in the key rate.

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“There [Banque du Canada] It has recently begun a gradual reduction in its key rate, but it remains at a high level from a historical perspective at 4.75%,” economists and authors Maud Drapeau and Lorenzo Tessier-Morey suggested. Report Published on Tuesday.

The country is therefore third on the podium, behind Australia and Switzerland to claim the gold medal.

Rising interest rates, combined with the rising cost of living, are making it more difficult for Canadians to save. Almost three out of five people believe their income does not keep up with the cost of living.

Even those with low incomes find themselves lost in their budgets. It mainly focuses on basic needs like housing, transportation and food, according to the study.

Household income generally declined for all but the wealthiest Canadians. “From 2021 [ils] only recorded an increase in their real disposable income,” the report said.

One of the reasons is that high interest rates, especially on housing and vehicles, affect income distribution that favors the wealthiest.

According to Desjardins, these are the people who accumulated the majority of the total debt. Yet they have more financial assets and investments, which explains their higher incomes.