Household debt is at an all-time high in this country with Canadians in the red for a whopping $1.3 trillion, according to a new survey.

Mortgage debt accounted for $900 billion of the nation's debt-load, while consumer debt was $400 billion of the total.

The new survey from the Certified General Accountants Association of Canada finds that Canadians are borrowing more to stay afloat during tough economic times, said Rock Lefebvre, the author of the report.

"We took a look at those numbers about a year and a half ago and we were at $1 trillion, and we would have hoped to see something different, and that was before the big hit," Lefebvre, the CGA's vice president of research and standards, told CTV's Canada AM.

"So we've managed to escalate to $1.3 trillion, and alarmingly, people continue to borrow even in this time of recession."

According to the report, 85 per cent of Canadians said they had outstanding debt on their credit cards.

Pamela Olmstead is one of those Canadians. She's a single mother, part-time student and part-time worker, and she has been carrying $4,000 in credit card debt for the past four years.

"I pay as much as I can, but with the interest, I never seem to catch up at all," she said.

Here are some other key points from the report:

  • Fifty-eight per cent of respondents said living expenses were the main reason for the increasing debt -- up from 52 per cent in 2007.
  • Credit cards and lines of credit accounted for the largest proportion of consumer debt.
  • One quarter of Canadians said they would not be able to handle an unexpected expenditure of $5,000. One in 10 would struggle to cover an unexpected expense of $500.
  • Forty-two per cent of Canadians acknowledged their debt is on the rise.

The report also said many Canadians have an unrealistic perspective on their own financial situation -- believing it to be better than it is.

While the study found that 84 per cent of Canadians are concerned that their household debt is rising, 79 per cent of Canadians who are in debt, said they can easily manage their debt and even take on more.

Lefebvre said the report reveals that people have shifted in the way they think about borrowing, in particular when it comes to mortgage debt.

"In the past, people would look at the total cost of the home and determine if that was a number they could live with," he said.

"Today, people make that purchasing decision based on the monthly costs, which tends to be a reflection of what we're earning today in good times."

As a result, a mortgage taken on in good economic times can quickly become unmanageable during a recession, job loss, or stock market crash, Lefebvre said.

Lefebvre said Canadians who are facing overwhelming debt should be honest about their situation and set realistic goals, consider all options for reducing their debt, and borrow only what they feel they can afford, not what the bank will give them.

With a report by CTV's Rob Brown in Vancouver