This increase should come as no surprise, as the denominator—household income—has declined with sharp decreases in employment and hours worked. The numerator—debt—is a stock variable that cannot change significantly in the short term. Nonetheless, we do not expect a sharp increase, in part, because of the government’s income replacement policies.
Once we are through the containment period, we can better gauge how permanent the change is and what it means for the financial vulnerability associated with highly indebted households. The road ahead for household spending The recovery period has begun in all provinces as the containment measures are relaxed and economic activity is picking up.