New data from Statistics Canada shows that household debt remains elevated, but as policymakers grapple with Covid-19 fallout, concerns about household finances are being pushed to the background.

StatsCan released new data showing that the household debt service ratio reached a record high in the fourth quarter, and the debt-to-income ratio is still near record highs.

Household debt as a proportion of disposable income ticked down from 176.6% in the third quarter to 176.3% in Q4, the agency reported.

At the same time, the household debt service ratio — which represents payments of principal and interest as a proportion of household disposable income — rose to 14.98%, StatsCan said. Debt payments grew by 6.9% in 2019, while disposable income rose by 4.9%.

Of course, conditions have changed significantly since these readings were taken.

“With Covid-19 rapidly changing the economic outlook, concerns about consumers’ borrowing binge have been set aside for now,” said BMO Economics in a report.

As interest rates fall in response to the Covid-19 outbreak, pressure on household finances may be set to ease, BMO suggested.

“Disposable income will likely slow as overall activity takes a big hit in the near term, raising the debt ratio. But, with the [Bank of Canada] already lowering rates (and poised to cut further), the debt service burden should ease, providing some relief to households,” it said.

StatsCan data also showed that national net worth rose by $182.7 billion in the fourth quarter to $12.7 trillion, powered by stronger stock markets.

“Of course, that’s in the rear-view mirror now,” BMO noted.

Household net worth grew by $186.5 billion to $11.7 trillion, StatsCan reported.

“The value of financial assets grew $153.8 billion, benefitting from $98.6 billion in upward revaluations in equity and investment fund shares, as both foreign and domestic equity prices increased,” it said.

StatsCan also reported that household borrowing rose to $95.1 billion in 2019, up from $85.3 billion in 2018.

Yet, borrowing remained below the $100 billion mark, which had been topped in each of the previous three years.