Canadians are virtually the only country where households have taken on more debt during the recession.

U.S. household debt shrank 1.7 per cent over the past year however Canadian debt levels have soared 7 per cent.

Most of this increase in debt levels has come as a result of the huge mortgages Canadians are taking out to buy homes at increasing prices.

A CIBC economist reported some worrisome consumer spending signs:

• Disposable income growth going down for the past year
• Household debt increasing three times faster than income growth
• Canadian liabilities increasing twice as fast as their assets over the last two years
• The ratio of house prices to income the largest gap in 20 years

Suggestions for change:

• Pay of mortgages quickly
• Do not take on more debt to buy Real Estate at elevated prices
• Cut out frivolous spending
• Think longer term to stretch retirement savings

With higher interest rates on the way as early as July 1, household spending can not keep growing and it is not sustainable without income growth.