Consumer debt reaches new high

By The IJ Staff | March 14 2018 01:30PM

Photo: Freepik

Including mortgages, Canadian consumers owe $1.821 trillion as of Q4 2017, according to Equifax Canada’s 2017 Q4 National Consumer Credit Trends Report. This compares to $1.797 trillion in Q3 2017 and $1.718 trillion a year earlier – an increase of 1.3 per cent and 6 per cent, respectively.

The report, released this week, says that 46 per cent of Canadians decreased their personal debt, however 37 per cent added more debt and did so in larger amounts on average, pushing the average debt up by 3.3 per cent year-over-year to $22,837 per person.

On a debt classification basis, the installment loan, auto loan and mortgage sectors are showing significant increases of 10.3 per cent, 6.5 per cent and 6.2 per cent year-over-year, respectively, says Equifax.

Most people are managing their payments

“Despite the high debt, mortgage payments are generally on time, which could be attributed to low unemployment numbers and mortgage and auto finance interest rates which are still at historically low and reasonable levels,” said Regina Malina, Senior Director of Decision Insights at Equifax Canada. “As the new mortgage rules begin to impact approval rates, there may be a shift in the profile of mortgage customers, and activity in the real estate market, but at this point most people are managing their payments.”