Canadian debt reaches $1.3 trillion

VANCOUVER, British Columbia, May 26 (UPI) -- Household debt in Canada reached an unprecedented $1.3 trillion in 2008, a report by the Certified General Accountants Association of Canada said Tuesday.

The findings published by the group in Vancouver said the results were based on surveys conducted in November that also showed a worrying trend of Canadians perceiving their financial condition to be better than it really is.

Anthony Ariganello, president of the CGAA Canada group, said in a release the findings indicate ignorance is leading many households into jeopardy.

"Many Canadians are not aware of how the economic downturn has impacted their financial situation and continue to load up their credit cards and lines of credit, while committing few, or in some cases, no resources to savings," he said.

The study of an undisclosed number of consumers found lines of credit and credit cards account for the largest proportion of consumer debt, with 85 percent of Canadians reporting they have outstanding debt on a credit card. Some 21 percent of Canadians who are in debt say they are in over their heads and can no longer manage their debt load.

The release said while the CGAA recognizes the importance of consumer spending for business development and economic growth, it recommends saving and paying down debt as a more desirable option than trying to promote consumer spending as a solution for the current economic downturn.