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While the Bank of Canada keeps sounding the alarm over the sorry state of the average Canadian's balance sheet, there's one economist, at least, who doesn't think our non-stop spending and low savings are a problem.

Douglas Porter, deputy chief economist at BMO Capital Markets, says that while total household debt has been "rising relentlessly through thick and thin this cycle, going up as a share of income to record highs in both good times and bad," we should look on the bright side: Household assets have been rising too, thanks to a rebound in equity markets from last year's depths.

Canadian savings are averaging 4 per cent, which is twice what they were in 2005, but not as impressive as the 6 per cent Americans are now socking away. Canadian household debt, on the other hand, is now sitting above 140 per cent of disposable income, a record high and "almost as high as it is in the U.S. when you measure it on an apples-to-apples basis," Mr. Porter said Wednesday during a conference call.

But let's not get all freaked out, Mr. Porter says: "This singular focus on the debt side of the balance sheet really overlooks the very clear improvement under way that we've seen on the asset side of the ledger in the past year or so. When you take this into account, Canadian household finances are not nearly as stretch as commonly perceived."

What's considered an asset? Our cash, investments, life insurance and pension assets. Mr. Porter says these are expected to rise to $2.7-trillion by the end of the third quarter, compared to our $1.5-trillion in debt.

Looking ahead, Mr. Porter says 2011 will be a year of slower spending. He also expects a slower increase in debt – at 5- to 6-per-cent growth – but it won't be as slow as our growth in income, at 4 to 5 per cent, he says.

"The oft-stated household income-to-debt ratio will continue to grow in the year ahead, not as fast as it has been growing," he says.

Laurie Campbell, executive director of Credit Canada, says while it's great that household assets are increasing, Canadians should not put themselves in the position of having to fall back on them.

"Often conditions won't allow for you to cash in, so you still have to deal with the current situation, which is high debt levels and interest rates that are going to go up."