Alberta’s average consumer debt levels continue to rise

An Equifax report says the province’s average debt was $29,508, the highest of any province in the country

Alberta and its major centres have the highest average consumer debt, excluding mortgages, in the country – and those levels continue to rise, according to new report by Equifax Canada.

The report says Alberta’s average debt was $29,508, the highest of any province in the country. That was up 4.1 per cent year over year in the fourth quarter of 2018. The average debt across Canada was $23,520, up three per cent.

Alberta’s two largest cities were the highest in Canada among major markets surveyed. Calgary was at $30,099, and up 2.1 per cent year over year, and Edmonton was at $28,863, up six per cent. Fort McMurray’s average debt, excluding mortgages, was $39,914 – a 4.1 per cent hike from the previous year.

The 90-day delinquency rate dipped by 1.2 per cent in Alberta to 1.35 per cent. Calgary’s delinquency rate of 1.21 per cent rose by 3.1 per cent while Edmonton’s was at 1.41 per cent, down by 3.3 per cent. Fort McMurray saw a hike of 0.4 per cent to 1.76 per cent.

Nationally, Equifax said the delinquency rate was 1.07 per cent in the fourth quarter of 2018, up 0.4 per cent from the previous year.

“As we expected, the worm is turning in the Canadian credit market,” said Bill Johnston, vice-president of data and analytics at Equifax Canada, in a statement.

“Bankruptcies are up 15 per cent in the last half of 2018 and the small increase in delinquency rates mask some underlying weakness. Rising delinquency is likely to become the norm in 2019.”

Across the country, Equifax reported:

“While the 90-day-plus delinquency rate was up marginally from a year ago, seniors have now reported three straight quarters of rising delinquency. In the fourth quarter, the delinquency rate for seniors was up by 7.2 per cent and the increases are gaining momentum.

“From a regional perspective, Manitoba posted the most significant increase in delinquency at six per cent with Saskatchewan (1.1 per cent), Quebec (1 per cent) and B.C. (0.6 per cent) also higher.

“Mortgage delinquency remained very low, but did trend higher in many regions. Manitoba posted a 19 per cent increase in 90-day mortgage delinquency with Saskatchewan up nine per cent. Quebec (four per cent) and Ontario (two per cent) also posted higher mortgage delinquencies, breaking a long winning streak that stretched back to at least 2015 quarter four.

“As for credit growth, bank loans remain the primary engine, rising 6.5 per cent year over year in the fourth quarter to an average of $27,667. Credit card balances were up 2.4 per cent to $3,904, partly reflecting the fact that fewer people are paying off their cards in full each month. Slowing car sales have put a drag on automobile finance loans, which were up only one per cent in quarter four. There has been a significant shift to leasing, as higher interest rates are impacting the manufacturers’ financing terms.”

Mario Toneguzzi is a Troy Media business reporter based in Calgary. He writes for Calgary’s Business.

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