Although there have been a lot of alarm bells going off as Canadian debt levels start toapproach the pre-recession levels of their U.S. counterparts, CIBC believes thespending spree may be coming to an end.

In the bank’s recent Household Credit Analysis report, Benjamin Tal states that household credit in Canada has been softening since September 2009. Between September and March, household credit expanded at a slower pace than nominal GDP — the first time it’s done that in seven years. Below are some of the highlights of the report: – While mortgage outstanding is still rising at a rate of 8% year over year, the monthly pattern is running at the slowest pace since 2003 – Lines of credit are increasing by a monthly pace of less than 1% — the slowest pace since 2007. – Overall growth in credit card outstanding debt has stabilized at 0.6% – Housing market supply is up 3% in the second quarter of 2010, with demand falling by close to 9% Tal expects arrears to stop their upward trend as the labour market starts to improve. And while debt-to-income ratio was still on the rise in the first quarter, debt interest payment as a share of income is going downward. This isn’t much of a surprise, really. Canadians were rushing out to take advantage of bargain-basement interest rates. With nowhere for interest rates to go but up, it’s nice to see that, for the most part, consumers are paying off their remaining balances and going back to their conservative ways.