According to the latest figures released, the level of household debt in Canada has recorded an increase of 1.8 per cent in the second quarter.

The household debt level in the country is now at a similar level to the United States just before the housing bust and the financial crisis of 2008. Statistics Canada report shows that the debt-to-income ratio in the country rose to 163 per cent.

The figures also showed that the Canada's 2011 debt ratio stood at 161.7 per cent and not 150.6 per cent as estimated earlier. Statistics Canada pointed out that the change in the previous year's ratio is due to a change in the method to calculate household net worth. The new method is more aligned to international practices, according to the agency. The agency has excluded non-profit institutions in order to get a better valuation of family homes.

Experts believe at the housing market in the cooling everywhere except Vancouver. House sales over the Multiple Listing Service (MLS) system recorded a fall of 5.8 per cent in August compared to the previous month. This is the largest fall in house sales in about two years indicating that the changes to rules made by Finance Minister Jim Flaherty in July have cooled the Canadian housing market.