Government officials are now meeting with Bay Street banks to try and come up with new ways to drive down persistent high levels of consumer debt.
The Globe and Mail cited sources as saying that Michael Horgan, deputy finance minister, has spoken to a number of executives from major firms, and that bankers have been open to the idea of increasing down payment requirements and cutting loan terms.
The paper says that recent low Canadian interest rates have led some borrowers to take on additional debt while rates are low, perhaps overextending themselves in some cases – a trend that could cause issues should it continue unchecked.
"We're not in dangerous territory right now," Gordon Nixon, chief executive officer of the Royal Bank of Canada, told the paper. "But taking steps to ensure that we don't have a problem is a prudent thing to do."
Many Canadian households have a significant debt load to handle, which has raised eyebrows among many industry analysts. The average family has a debt to income ratio of 146 percent, an unprecedented figure.