Ontario consumers are growing their debt faster than other Canadians, says Equifax Canada's 2017 Q2 National Consumer Credit Trends Report released Sept. 5. The report also shows that Western Canadians have significantly reined in spending.
In the second quarter, total consumer debt across Canada, including mortgages, climbed to $1.769 trillion compared to $1.666 trillion during the same quarter of 2016 – an increase of 6.2 per cent. When mortgages are not included, Ontario's average consumer debt rose by 5.1 per cent over the same period. This is the highest debt growth in the country and contrasts sharply with Saskatchewan and Alberta which saw the lowest increases at 1.7 per cent and 1.8 per cent respectively, says Equifax.
Rising interest rates
"Desire to take on more debt is certainly highest in Ontario," states Regina Malina, Senior Director of Data & Analytics at Equifax Canada. "Even in the face of potential increase of interest rates, consumers across the country continue to borrow and spend to some degree. Their overall ability to pay back this money on time remains stable though. As interest rates gradually rise, and borrowing costs increase, this trend may be impacted over time."
Delinquency rates decline
Equifax says delinquency rates, which were already low, continue to decline in every province compared to previous trends. “In Alberta, the delinquency rate increased by just 1.7 per cent compared to a year ago, following two years of larger quarterly increases. Ontario, P.E.I and B.C. saw lower delinquency rates with decreases of 8.1 per cent, 10.6 per cent and 9.8 per cent respectively,” says Equifax.
In Q2 2017, average consumer debt (exclusive of mortgage debt), increased to $22,595 and the overall delinquency rate lowered to 1.09 per cent.