Despite all the worry about the indebtedness of Canadian households, a new report from BMO Economics says that the concern may be overblown at this point.

The report acknowledges that, apart from the housing market, “no other financial issue has generated more angst in Canada than high household debt”. However, it says that the problem isn’t as bad as some believe.

It aims to debunk several myths around the state of household debt. For one, it explains that Canadian household debt isn’t higher than U.S. households had been in the run up to the financial crisis, as many believe. Moreover, the report says that credit growth has slowed down in the past couple of years. And, it stresses that the Canadian subprime mortgage market remains small.

Finally, BMO points out that total financial assets are three times greater than debt, which is in line with long-run norms, delinquency rates have actually fallen, and consumer bankruptcy rates are at record lows.

That said, there are reasons for concern, it allows. For example, the report notes that about 12% of families have debts greater than 250% of disposable income; and, they account for about 40% of outstanding debt. “With little cushion in the event of job losses or higher borrowing costs, this group of heavily indebted households is at elevated risk of default and reduced spending,” it says.

Additionally, BMO notes that debt service costs haven’t fallen with interest rates. And, it says that Albertans are the most indebted, and some households in that province are facing the threat of job losses amid the dive in oil prices.

“Most Canadians don’t have a debt problem, and will have little trouble managing their finances when interest rates finally normalize. However, a significant number of heavily indebted households are vulnerable to rising interest rates or recession. While close monitoring of credit trends is warranted, it’s too early to sound the alarm bells,” it concludes.