Obviously, this has been highlighted as a key risk to the Canadian economy going into COVID-19. I think the fundamentals are pretty clear to everybody. Canadians were bearing a pretty heavy debt load in relation to their income. Probably the best flagship measure is the debt-to-income ratio that Canadian households carried into the crisis.
For fundamental reasons, we wanted to have a lower debt load so that when we endured the crisis, Canadians would be able to smooth their consumption effectively by taking on more debt. In that position, we've endured the crisis. Notwithstanding some of the very generous government support programs, Canadians are going to have to take on more debt to fund not just their essential needs, but some non-essential needs, such as paying insurance or putting gas in their car. That debt level is going to creep higher.
Just on a nominal basis, there isn't some optimal level of debt for any household to carry. I think we're probably overly fixated on the number. In the same context, Canadians' ability to service that debt will be relaxed with lower interest rates and longer amortization periods or mortgage deferrals.
It's definitely something we need to keep our eye on. As we recover through this crisis there will be another crisis around the corner, and the same expectation will be that Canadians will have the opportunity to deleverage. Then, when they need to make ends meet during the next crisis, they might have to take on more debt at that point in time. It's something we always keep our eye on, but we do it, I think, in balance with other vulnerability metrics.