Since 2008 the world has witnessed significant volatility and strain on the financial sector. Canada has not only weathered the storm, but emerged as a good example of fiscal responsibility. However, the stability of our banks, businesses and government is not reflected in the balance sheets of individual Canadians. Household debt has increased rapidly in Canada over the last 20 years and has outpaced the country‘s economic growth since 2003. Today, with Canada‘s total household debt exceeding $1.5 trillion – three times the national debt – Canada faces unprecedented financial vulnerability, threatening both individual and national economic well-being. The Action Canada Task Force on Household Debt proposes two broad solutions that will influence Canadians to make better borrowing decisions.

First, a Code of Conduct on Lending for credit providers and insurers needs to be developed by the Canadian government in collaboration with the financial institutions and other relevant stakeholders. This code would enforce practices geared to decrease borrowers‘ financial vulnerability associated with high levels of household debt and ensure that borrowers understand potential risks associated with mortgage and consumer debt.

Second, an organized effort must be launched to increase awareness among Canadians about household debt, encourage them to reduce their current levels of debt and promote savings for improved long-term financial security. This includes a national public awareness campaign, improved financial literacy programs, and the promotion of self-monitoring options. Debt councillors, financial institutions, educational institutions and government agencies must all be involved in developing these programs.