TORONTO — A Statistics Canada report says households slid deeper into debt in the first quarter as the use of credit outpaced income growth.

The agency says the ratio of household debt to disposable income in the quarter rose to 149.47 per cent from 147.64 a year earlier.

That means Canadians owe $1.49 for every after-tax dollar they earn.

Stats-Canada also says credit market debt grew by 1.3 per cent in the quarter, while personal disposable income grew by 0.7 per cent.

In the report, Bank of Montreal economists Douglas Porter and Sal Guatieri say households "can't fully resist the lure of interest rates at persistently rock-bottom levels."

They note that household credit market debt climbed to a new high of 147.3 per cent of disposable income, on the back of the Bank of Canada's decision to leave overnight rates unchanged since last September.

"Canadian debt ratios are now leaving their U.S. counterparts in the rear-view mirror, despite the repeated exhortations by domestic policymakers to rein in borrowing. It seems that (interest rate) actions speak louder than words."

However, the increase in consumer credit debt slowed along with lower household spending.

The weakness in consumer spending also reflects the fact that higher energy and particularly gasoline prices are taking a bigger bite out of household budgets, leaving less for other spending. That, combined with high levels of indebtedness are expected to weigh down purchases going forward.

"Although household debt growth has cooled notably in recent months--April's 5.5 per cent (year-over-year) was the slowest pace since early 2002--the plain fact remains that it continues to outstrip income growth," Porter and Guatieri wrote.

Consumer credit slowed more than mortgages in the first quarter, as mortgage borrowing may have been boosted by a rush into the housing market ahead of tighter mortgage lending rules that took effect in March.

The debt-service ratio -- the ratio of cash available to pay principal, interest and lease payments -- also rose in the first quarter, due to weaker income growth and moderately higher borrowing costs.

Bank of Canada governor Mark Carney warned last week that Canada's housing market is entering overheated territory and many Canadians could be financially hurt once interest rates begin to rise.

Carney has been cautioning Canadians for about two years against getting overextended on mortgage borrowing, but his speech to the Vancouver Board of Trade last week suggested some frustration that his words have mostly fallen on deaf ears.

The governor said he has been expecting the housing market to slow, but besides some stuttering signals, it has picked up again recently, along with borrowing and mortgage credit.