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Fears about record-high Canadian consumer debt may be overblown because Canadians are also beginning to save more and increasing their household wealth, says a Scotia Economics study released Thursday.

"Households today are comfortable carrying a higher debt load relative to their annual income flow in part because they have greater wealth," Scotiabank's chief economist Warren Jestin wrote in the report.

Canadian households have come under fire from top economists - and the Bank of Canada - recently for taking on record-high debt levels as consumers become accustomed to easy borrowing in the current low interest rate environment.

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The central bank has estimated that Canadian debt-to-income ratios hover around 147 per cent. That means that for every dollar earned, consumers owe $1.47.

Mr. Jestin said he understands recent concern over the rapid rise in borrowing that has pushed Canadian household debts to new records.

However, household net worth, or assets minus liabilities, is still close to a record high, he added. That's because personal savings levels are increasing, house prices remain close to record highs and stock values have returned.

"Many households in Canada emerged from the recent global downturn less damaged than their G7 counterparts in terms of job losses and wealth declines, and more confident to take on additional debt."

However, given the high unemployment rate and record debt levels, consumer borrowing will slow down in the year ahead and the odds of a full-blown relapse into recession are relatively low, he added.

"A reassuring note is recent evidence that Canadians are already beginning to trim back the pace of borrowing while boosting their precautionary savings," Mr. Jestin said.

"Home sales have cooled sharply this year, consumer discretionary spending is slowing, and the personal savings rate is moving up. We expect credit growth to slow more in line with underlying income trends over the next year, suggesting a levelling out in the aggregate debt-to-income ratio."

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A strong housing market, which led the economy out of recession, has been a main contributor to the highest domestic debt burdens in history.

Consumers took on bigger mortgages to buy up houses in an environment of ultra-low interest rates that have created an opportunity for many people to spend more than they can actually afford.

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