PM Harper's resolution for Canadians: Watch your debt levels! -

PM Harper’s resolution for Canadians: Watch your debt levels!


OTTAWA – Prime Minister Stephen Harper has a suggestion for Canadians looking for a New Year’s resolution for 2013: go easy on consumer debt.

While most Canadians are living within their means, they need to be thinking about what could happen if interest rates suddenly rise, Harper told Global News national anchor Donna Friesen in an interview.

Statistics Canada reported earlier this month that debt levels were at their highest yet — for every dollar of after-tax income Canadians bring home, they’re borrowing more than $1.64.

“I’m convinced we’re now seeing a moderating trend in this, and I think it’ll start to turn down in the next year and a year or two, but we continue to urge people to have caution because eventually, interest rates will go up,” Harper said.

“You should be asking yourself, ‘If interest rates were a couple of points higher, can I really afford the debt load I’m taking on now?’ And so we just urge people to be cautious on that.”

Mortgage debt is the primary driver of higher consumer debt loads after years of low interest rates.

Statistics Canada said that between July and September of this year, households borrowed $27.3 billion, $18.4 billion of it in the form of mortgages.

Consumer credit levels increased by $7 billion to $474 billion.

Harper’s comments echo concerns raised in recent months by both Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney that debt levels are getting too high.

“That’s why the government is taking some measures to provide incentives to households not to borrow quite so much,” Harper said in the interview.

“But you know, the fact of the matter is, this is (a) decision that households have to make for themselves.”

Mortgage rules were tightened over the summer, including a reduction in how long Canadians can borrow the money for their house.

The housing market cooled off slightly afterwards and the Canadian Real Estate Association has said it expects that to continue into next year.

Harper says Canadians also need to look at the long-term picture, especially as baby boomers head towards retirement with uncertain pensions.

“What I’d say to all Canadians is balance your debt levels, balance your borrowing, and balance your ambitions in terms of house ownership with some savings as well,” he said.

Meanwhile, don’t panic about the world, Harper said.

While things may look gloomy in the U.S. and Europe, Canadians need to focus on their own prosperity, he said.

“Let’s focus as a country, and focus as an investor or worker, on what you can do to make your job and your company more competitive in the years to come,” he said.

“That’s what we’re focused on.”

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PM Harper’s resolution for Canadians: Watch your debt levels!

  1. Easy for him to say, TAXES, TAXES and More TAXES, thats Canada for you.

    • That’s every other country for you.

  2. Harp lives in public housing, on a whack of tax money, with a luxury car, a plane, bodyguards, a chef and other servants…..and he will retire on a gold-plated govt pension to numerous board positons with oil companies…..but he’s telling other Canadians to ‘watch their debt levels’.

    Yah….really connected to reality, that boy.

    • He makes just less than $316 K. He gets a 2 thousand dollar car allowance. My family member who is an internal medicine specialist is getting paid $350K. Oh and I do believe houses and cars, etc are all taxable benefits in Canada. Of course in the case of the Prime Minister, he has NO CHOICE but to live in the house they designate and to fly in the plane because as you know being a former elected official yourself Emily, it can be a dangerous job and the extra security is mandated. Did you find that to be the case when you were prime minister or were you just a premier?

      As for being connected to reality…Harper’s private home is in a modest community in Calgary. It is a two-story run of the mill home. He came from a middle class family. He isn’t like so many of our other prime ministers who were born with a silver spoon shoved up… any rate, he was never rich. Further, it seems that in warning Canadians to watch their debt levels, Mr. Harper is just repeating what Mark Carney has been saying all along. Now Mr. Carney…what would “that boy” know about the reality of debt….he will be making almost $700K and getting at 400K housing allowance in London….hmmm.

      • It was a stupid thing for Harper to say, and it’s a stupid thing for you to defend.

        • So when Justin Trudeau who is rich gives out advice on household debt, you call him stupid too?

          • Has he done so?

  3. It’s interesting how leaders ask us to consider whether we can handle higher interest rates, and yet the government doesn’t seem to consider the same hikes as they put us further and further into debt.( I mean encouraging more consumer debt by garanteeing even more mortgages AND the government’s deficit spending.) If you accept that our big bro the USA ultimately controls the rates, and that their economy has pretty well bottomed out and their recovery will come in the near to middling future along with higher interest rates, you might agree that Canada is heading for a bad place with a combo of falling real estate values ( I won’t use the C word.) and higher rates. As Trailer Park Boys’ Mr. Lahey says: “A sh$t storm is coming”.

  4. Canadians to Harper and all provincial premiers: please stop racking up debts to support the immigration industry!
    Every province and city in Canada has a “fiscal cliff” looming including those already taxed to death. In many large cities, like Toronto and Montreal, there is no money to repair essential infrastructure but there is endless money for resettlement of immigrants and social programs for refugees. Canada stopped needing mass immigration decades ago. Immigration is a drain on all public finances in Canada whether at the Federal, Provincial or Municipal level. It’s the ultimate sacred cow that most people prefer to avoid speaking up about. It’s a good thing we also have tons of money for Orwellian “human rights” commissions whose main function seems to be to stifle debate about immigration.

  5. How about he stops companies such as Rogers and Bell/Alliant from ripping people off with hidden charges and fees, stops banks from charging ridiculous fees and interest, and stops allowing “rent-to-own” companies to charge 2-3 times what an item’s worth when they’re practically the only option for young people to furnish their apartments when they’re just starting out, and then we’ll talk.