Canadians have amassed a $2-trillion mountain of household debt that91裸聊视频檚 casting a big shadow over the timing of the Bank of Canada91裸聊视频檚 next interest rate hike, governor Stephen Poloz said in a speech Tuesday in Yellowknife.

To Poloz, the 91裸聊视频渟heer size91裸聊视频� of debt burden also means its associated risks to endure for a while, although he91裸聊视频檚 optimistic the economy can navigate them.

The debt pile, he said, has been growing for three decades in both absolute terms and when compared to the size of the economy 91裸聊视频� and about $1.5 trillion of it currently consists of mortgage debt.

The central bank has concerns about the ability of households to keep paying down their high levels of debt when interest rates continue their rise, as is widely expected over the coming months.

91裸聊视频淭his debt has increasing implications for monetary policy,91裸聊视频� he said in his address to the Yellowknife Chamber of Commerce.

Related: Bank of Canada holds benchmark interest rate as economic growth moderates

Poloz has introduced three rate hikes since last July following an impressive economic run for Canada that began in late 2016.

But the central bank stuck with its benchmark rate of 1.25 per cent last month as it continued its careful process of determining the best juncture for its next hike. The bank91裸聊视频檚 next announcement is May 30, but many experts only expect Poloz91裸聊视频檚 next increase to come at July91裸聊视频檚 meeting.

Poloz said Tuesday that the volume of what Canadians owe is one of the key reasons why the bank has been taking a cautious approach to raising its trend-setting rate. He called it an important vulnerability for individuals and leaves the entire economy exposed to shocks.

91裸聊视频淭his debt still poses risks to the economy and financial stability, and its sheer size means that its risks will be with us for some time,91裸聊视频� Poloz said.

91裸聊视频淏ut there is good reason to think that we can continue to manage these risks successfully. The economic progress we have seen makes us more confident that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed.91裸聊视频�

Poloz said debt is a natural consequence of several factors, including the combination of a strong demand for housing and the prolonged period of low interest rates maintained in recent years to stimulate the economy.

The governor also provided detail on issues the bank is examining as it considers the timing of its next rate increase.

If it raises rates too quickly, the bank risks choking off economic growth, falling short of its ideal inflation target of two per cent and could lead to the type of financial stability risk it91裸聊视频檚 trying to avoid, he said.

But if the governing council lifts the rate too slowly, Poloz said it could intensify inflationary pressures to the point it overshoots the bank91裸聊视频檚 bull91裸聊视频檚-eye. Poloz added that moving too gradually could also entice Canadians to add even more debt and further boost vulnerabilities.

In his speech, he also noted several other areas of concern the bank is monitoring closely as it considers future hikes. They include the economic impacts of stricter mortgage rules, the ongoing uncertainty about U.S. trade policy, the renegotiation of the North American Free Trade Agreement and a number of competitiveness challenges faced by Canadian exporters.

91裸聊视频淭hese forces will not last forever,91裸聊视频� Poloz said.

91裸聊视频淎s they fade, the need for continued monetary stimulus will also diminish and interest rates will naturally move higher.91裸聊视频�

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Andy Blatchford, The Canadian Press

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