Canadians took on slightly less new debt last quarter compared to what they earned, but they still owe $1.77 for every $1 they make, according to Statistics Canada's latest national balance sheet.
The debt-to-income ratio lowered by around half a percentage point from the first quarter of 2019, from 177.54 per cent to 177.1 per cent.
It was the third consecutive quarterly decline, as income grew slightly faster than debt.
Household disposable income increased 3.4 per cent since the third quarter of 2018, while household credit market debt grew 2.8 per cent.
Despite the improvement in earnings, the total debt owed by Canadians is still growing.
On a seasonally adjusted basis, total credit market borrowing increased to $23.5 billion from $18.9 billion in the previous quarter.
Credit market debt totalled $2.25 trillion in the second quarter including nearly $1.47 trillion in mortgage debt and $782.9 billion in consumer credit and non-mortgage loans.
"Canadians continue to rely on their credit cards or lines of credit to supplement costs of living," Scott Hannah, president of the non-profit Credit Counselling Societys, said in a written statement about the report.
He said people need to prepare now for a potential recession in the future.
"It's not too late for Canadians to turn their financial situations around — track your spending, create a budget/spending plan, put aside money for savings and start to chip away at your debts."