With respect to household indebtedness, it's clear that one of the main factors is the relatively low level of interest rates, which of course encourages people to take on more debt. Another big factor contributing to high levels of debt is the relatively high price of housing. When household formation happens, people want to live somewhere, obviously, and they have a choice either to rent or to own. Owning means buying a house and incurring some mortgage debt, and when the prices are high and interest rates are low, that leads to high indebtedness.
It's not an issue, in and of itself, but it is a concern for us as economists when we see that households have high levels of debt. It's obvious that it's not sustainable in the optics of rising interest rates. It's bound to lead to some imbalances in the economy.
With respect to whether it is the right action to limit the growth in credit and have tighter mortgage rules, that's a very delicate question. It's obvious that something needs to be done. However, with the high prices of housing, it means that some people will be denied access to housing.
Something needs to be done, obviously, to rein in the high levels of debt, but it has the unfortunate collateral effect of preventing some people from accessing property, especially in the high-priced markets of Vancouver, Toronto and now, more and more, in Montreal.