The simulation generates a scenario indicating that, by the middle of 2012, almost one in ten (9.6 per cent) Canadian households would have a debt-service ratio greater than 40 per cent, the threshold above which households are considered financially vulnerable (Table 2). Moreover, the percentage of debt owed by these vulnerable households would almost double.
Both of these metrics are well above their recent peaks. 8 While these simulation results are purely illustrative, they give pause for reflection. It would not be healthy to have almost 20 per cent of household debt extended to vulnerable households. Nor is it necessary to secure our recovery. The risks are not isolated to the most vulnerable.