Canadian households carry the most debt in the G7 by a wide margin. On the OECD-comparable indicator, Canada sat at roughly 173% of disposable income in Q4 2025 — about 43 percentage points above the United Kingdom, 73 above the United States, and 88 above Germany. No other G7 country sits within 40 points of Canada.
The gap has been wide for more than a decade and has barely narrowed: Canada's ratio peaked at 191% in 2018 and has eased only modestly, while peers have flatlined. The composition of that debt is what matters for the policy diagnosis. Roughly 73% of Canadian household debt is mortgages. The leverage problem is not a consumption problem; it is a housing problem with macro-prudential consequences. Households are highly exposed to rate shocks, real-estate corrections, and employment downturns precisely because so much of their balance sheet sits on one asset class.
Debt-to-disposable-income is the OECD standard cross-country indicator. It expresses household liabilities against the income stream that has to service them, which is what determines whether the debt is sustainable.
Source: OECD (Jan 2026 release for 2024); Statistics Canada (SDG 1.3.1, Q4 2025), ONS, IMF, national central banks for 2025 estimates.
| Rank | Country | Debt / disposable income (%) |
|---|
The G7 picture. Canadian households are about 43 percentage points more leveraged than the next-highest G7 peer (the UK) and roughly 73 percentage points above the United States. The gap to Germany — long Europe's fiscal anchor — is nearly 90 points. There is no other G7 country in Canada's range, and the 2024-to-2025 changes are small enough that the picture is essentially unchanged year-on-year.
Spreading the comparison across a decade strips out single-year noise and shows the structural gap clearly. Canada has been at or near 180% of disposable income for the entire period 2015-2025, peaking near 191% in 2018. Every other G7 economy has stayed below 140% the entire time. The UK and Italy moved meaningfully — the UK deleveraging from ~136% to ~118%, Italy edging up from ~65% to ~80% — but neither comes close to closing the gap with Canada.
Source: Canada — Statistics Canada SDG 1.3.1 (Q4). Peers — reconstructed from OECD, BIS, IMF, and national central banks (ONS, Federal Reserve, ECB, Bank of Japan). Annual values rounded to nearest percentage point. See methodology note below.
The current level is not a pandemic artifact. Canadian household leverage has been climbing steadily for four decades — from 66 cents of debt per dollar of disposable income in 1980, past 100% in the mid-1990s, past 150% during the global financial crisis, and to an all-time peak of 188.2% in the third quarter of 2022. The slight dip after that peak reflects faster nominal income growth, not deleveraging: debt has continued to grow in absolute terms each year since 2022.
Two structural shifts drove the climb. First, sustained house-price appreciation from the early 2000s onward required ever-larger mortgages. Second, low policy rates between the global financial crisis and 2022 made carrying that debt feel affordable. The post-2022 rate cycle exposed the underlying vulnerability — the debt-service ratio reached 15.3% of disposable income in 2023, near all-time highs, with a growing share going to interest rather than principal.
Source: Statistics Canada National Balance Sheet Accounts (Table 38-10-0238); OECD historical series. Pre-2000 figures are approximations from OECD historical commentary.
The composition of household debt matters as much as the level. In Canada, mortgages make up about 73% of all household credit market debt — a share comparable to Australia (~80%) and the United Kingdom (~78%), and well above Japan (~60%) or France (~65%). Total non-mortgage borrowing in 2025 was $30.7 billion, down nearly a quarter from $43.5 billion in 2024, indicating households are pulling back on discretionary credit even as mortgage balances grow.
The implication: Canada's household debt vulnerability is fundamentally a housing-market vulnerability. Stress tests that focus on credit-card delinquency will miss the dominant transmission channel.
Source: Statistics Canada (Canada Q4 2025); RBA, Bank of England, Federal Reserve, ECB, Bank of Japan (latest available, 2024).
The takeaway. Canada's household leverage is structurally high, structurally mortgage-driven, and structurally tied to the housing market. The G7 gap is not a quirk of any one year — it has widened almost continuously for two decades.
At roughly 173% of disposable income (Q4 2025), Canada sits about 43 percentage points above the next-highest G7 peer (the UK) and ~88 points above Germany. No other G7 economy is within 40 points of Canada.
Canada has sat at or near 180% of disposable income for the entire 2015–2025 window, peaking at 191% in 2018. Every other G7 economy has stayed below 140% throughout. The composition is mortgage-driven — roughly 73% of Canadian household debt is residential mortgages.
Whether measured against disposable income, GDP, or debt-service share, Canada ranks first in the G7. On debt-to-GDP Canada is at ~103%, ahead of the UK (~81%), the US (~69%), Japan (~65%), France (~61%), Germany (~50%), and Italy (~37%). The choice of measure changes the gap only at the margins.
Debt-to-disposable-income — used in the headline chart — is the OECD standard cross-country indicator. It expresses household liabilities against the income stream that has to service them, which is what determines whether the debt is sustainable. It is the measure that the OECD, the IMF, and most central banks treat as the cleanest cross-country comparison.
Debt-to-GDP is the BIS preferred measure, used because GDP is comparable across countries in a way that household disposable income (which depends on transfer systems, tax regimes, and household-sector definitions) is not.
Debt service ratio measures the share of disposable income actually consumed by interest and principal payments. Canada's was 14.4% in Q4 2024 — close to historical highs and a more direct measure of household stress.