Study: Reconciling Canadian-U.S. measures of household disposable income and household debt

View the most recent version.

PDF version

This analytical document provides guidance to data users who wish to undertake a comparative analysis of the disposable income and credit market debt of the Canadian and the U.S. household sectors.

The Canadian System of National Accounts was recently revised to better reflect the new international System of National Accounts 2008 accounting standard. In many cases, Canada has chosen to adopt international definitions and presentations.

In some cases, this resulted in a divergence between Canadian measures of national account information and U.S. measures. One difference concerns the measurement of household disposable income and credit market debt.

This study presents a way to place these two measures on a conceptually and definitionally consistent basis with the corresponding measures in the United States. It recognizes the current differences in data availability, concepts and definitions between the national accounts systems in the two countries.

In 2011, the level of Canadian household disposable income was 6.9% higher after adjusting it for U.S. concepts and definitions, whereas household debt was 0.5% higher.

As a result, the Canadian household credit market debt to disposable income ratio comparable with the U.S. measure was 150.23% in the fourth quarter of 2011. In the same quarter, the Canadian household credit market debt to disposable income ratio was 161.73%.

The study notes that this is considered an interim solution, and does not argue that this is a better or more representative measure.

As the national accounts systems in the two countries become more harmonized and better aligned to the international national accounting standards, the adjustments suggested in this study should become redundant.