In its 12th annual assessment of the state of Canadian family finances, the Vanier Institute of the Family reports that average family debt has now hit $100,000.

The debt is mostly attributed to the increase in housing costs. Many homes have seen 100-200% increases in prices over 20 years. Certainly a far cry from average inflation every year of under 3%.

However, the rising housing costs are not the only reason why debt-to-income ratios are at an all-time high. 150% is the number. That means for every dollar earned, on average, a Canadian owes $1.50.

Canadians seem to be ignoring the collapse in the US and readily accepting debt beyond their capability to repay.

Corollary to the debt levels, saving levels have continued to decline. Canadians are earning slightly more, buying far more than they earn, and saving even less of what they earn. That’s a sure way to financial ruin.

In 1990, Canadian families managed to put away $8,000, a savings rate of 13.0%. In 2010, that savings rate was down to 4.2%, averaging $2,500 per household.

IT’s only a matter of time before something has to give. Current price levels, debt levels, and housing prices are unsustainable. We don’t know when, but when the perfect storm of poor financial decision making hits it’s going to be very ugly for Canadians.

Data from the Vanier Institute of the Family.