Officials in Ottawa are warning that they could further restrict mortgage availability in an effort to cut down on rising debt levels across the country.
Finance Minister Jim Flaherty said that while previous generations have made it a focus to pay off their debt quickly, consumers now are less motivated to do so, which has led to elevated levels of debt for many nationwide. Making mortgage regulations tighter would restrict the flow of credit, and likely make it more difficult for consumers to take advantage of mortgage rates still below normal levels.
"As I've said before, if necessary, we will tighten the mortgage rules again. We keep an eye on the level of credit," he told Reuters. "There is no reason for extreme concern now. There is reason for concern, so I watch."
In addition to Flaherty's statement, Prime Minister Stephen Harper and Bank of Canada Governor Mark Carney also said that rising debt levels could be a significant risk.
Evidence of Canadians' reliance on debt can be seen in the use of credit cards, which remained strong in Canada throughout the recession, unlike in the U.S. Data from TransUnion showed that credit card debt in Canada slipped 1.7 percent, while it fell more than 11 percent in the U.S.