Higher public debt has helped slow build-up of household debt: BOC

OTTAWA - The governor of the Bank of Canada says the federal government’s steps in the last couple of years to take on more public debt has helped prevent an even faster build-up of household debt that has still managed to climb to historic highs. Stephen Poloz says Ottawa’s recent spending on programs, such as enhanced child benefits and infrastructure, have lifted the economy and pushed interest rates to a level higher than they would have been without government stimulus. He says the higher rates have helped keep the accumulation of household debt lower than it otherwise would have been had Canada continued with government belt-tightening approaches of the past. Poloz made the comments Tuesday as he responded to questions following a speech at Queen’s University in Kingston, Ont.