Consider the view of mortgage debt as an outside force of nature artificially boosting the entire economy now, only to inflict widespread pain and misery in the future. Let's look at another item of Canadian's balance sheet using a similar methodology. Below is the market value of Trusteed Pension Plan Assets in Canada over the past twenty years. Source: Statscan (table 50).
In this one category alone there is almost one trillion dollars of savings sitting out there waiting to be unleashed! The economy was artificially depressed over the past twenty years as these funds were being accumulated, increasing from $186 billion to $960 billion. This is more than could be accounted for from population and wage growth proving how prudent Canadians have really been!
Clearly it's flawed looking at a single item of Canadians total balance sheet with the perspective that "debt equals future pain and savings equals future prosperity". Mortgages should be thought of as a transaction between a creditor and a debtor, where consumption is shifted between them over time.
I don't want to imply there are no risks, but I think it is more useful to look at the quality of the mortgages as opposed to total outstanding loans.