Baby boomers and Canadians who least can afford it are the most responsible for statistics that show consumers are piling on too much debt, according to an analysis of household finances released Thursday by the CIBC.

The micro-examination of debt in Canada suggests the problem may be more serious than thought and sheds new light on Bank of Canada governor Mark Carney's statement last week that he is most worried about "vulnerable" households.

The raw numbers are bad enough. The ratio of household debt to disposable annual income has been rising steadily since 2007 and recently reached a record 153 per cent.

That puts Canadian households on the doorstep of the 160 per cent level, where Americans were prior to the housing collapse. But as the CIBC report suggests, households in other countries, particularly Denmark, the Netherlands, Norway and Switzerland have reached significantly higher thresholds without triggering a crisis.

"It's not only the amount of debt Canadians are carrying, but how many are getting close to the limit of their borrowing capacity," said CIBC chief economist Avery Shenfeld, co-author of the paper with economist Benjamin Tal.

"It would have been nice to have found that the rise in debt was coming from those with a lot of room to borrow, but instead what we see is those with a lot of debt are piling on more."

Another concern, Shenfeld said, is that Canadians over 45 years old who should be saving for retirement are increasingly dipping into the credit market, a trend likely contributing to the rise in bankruptcies among the 50 and older set.


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