Living dangerously

CANADIANS are not a people of excess. “Why did the Canadian cross the road? To get to the middle,” they joke. Temperance served them well during the global financial crisis. While property bubbles burst from Miami to Malaga and governments bailed out the banks that had puffed them up, Canada’s prudent financial institutions carried on, largely unaided by the taxpayer. Its economy recovered quickly, helped by higher prices for oil, one of its main exports.But something unCanadian has been happening of late. While consumers in post-bubble economies have been working off debt, Canadians have been piling it on. Consumer debt is a record 165% of disposable income, not far from the level it was in America before the subprime crisis. Most of that borrowing has been spent on houses. Canadian housing is now 34% pricier than its long-term average, when compared with disposable incomes.