Canadian consumers catch their collective breath - Some concerning signals from Q1 dissipate -
September 17 2019 - 5:00AM
Equifax® Canada’s report on Canadian consumer credit in Q2 shows
some cooling after a very active Q1 performance. Total debt per
consumer rose by 1.9 per cent to $71,970 at the end of the second
quarter in 2019. That comes after a robust 2.6 per cent growth in
average debt in the first quarter.
Mortgage debt growth continued to decelerate, with a 1.8 per
cent increase to $48,225 per consumer. Non-mortgage debt rose by 2
per cent to $23,745. This compares to a much larger 3% growth rate
in the previous quarter.
“It looks like, after turning to credit to clear their winter
blues, consumers were able to get back on a more reasonable track
through the spring,” said Bill Johnston, Vice President of Data
& Analytics at Equifax Canada. “There were some troubling signs
in the first quarter, with credit card usage and average debt
rising sharply for some vulnerable consumer groups. The results in
the last quarter are much more aligned to the current economic
situation.”
Delinquency has turned higher
The rate at which consumers were missing monthly payments was
higher in Q2, as the 90-day-plus delinquency rates turned slightly
higher again. At 1.12 per cent (+5.8%), delinquency rates for
non-mortgage products have erased the gains posted in the previous
2 years. Quebec (-0.3%) was the only province to post a slight
improvement in delinquency in the quarter. Newfoundland (+11%),
Alberta (7.9%) and Ontario (7.8%) led the way higher.
Delinquency was also higher for mortgages in the second quarter.
At 0.18 per cent, the 90-day-plus delinquency rate for mortgages
rose by 9.3 per cent in the latest quarter, representing the third
straight increase. British Columbia (+29%), Alberta (+17%) and
Ontario (+16%) had the most significant increases, though, in the
case of Ontario and British Columbia, the magnitude reflects the
very low levels of delinquency.
“The delinquency trend is rising but the magnitude has been
muted by the sharp jump in bankruptcies,” added Mr. Johnston.
“Traditionally, the trends in delinquency and bankruptcy have been
highly connected. That has completely broken down since mid-2018,
with bankruptcy outpacing delinquency significantly.”
A hold on interest rates provides a break
“The current holding pattern at the Bank of Canada provides
consumers with an opportunity to balance their financial situation”
concluded Mr. Johnston. “It can help keep delinquency rate
increases in check. The concern, particularly if rates are cut, is
that consumers could overextend themselves further. Any rate cuts
are likely short term. Locking into low fixed rates and avoiding
overusing credit cards is a prudent strategy to follow if rates
drop,” advises Mr. Johnston.
Debt (excluding mortgages) & Delinquency
Rates
Age |
Average Debt (Q2 2019) |
Average Debt Change Year-over-Year (Q2 2019 vs. Q2 2018) |
Delinquency Rate (Q2 2019) |
Delinquency Rate Change Year-over-Year (Q2 2019 vs. Q2 2018) |
18-25 |
$ 8,613 |
1.89 |
% |
1.69 |
% |
3.55 |
% |
26-35 |
$ 18,198 |
1.36 |
% |
1.60 |
% |
6.03 |
% |
36-45 |
$ 28,791 |
1.98 |
% |
1.27 |
% |
4.67 |
% |
46-55 |
$ 35,986 |
3.02 |
% |
0.95 |
% |
5.44 |
% |
56-65 |
$ 30,261 |
2.70 |
% |
0.85 |
% |
6.71 |
% |
65+ |
$ 16,549 |
2.88 |
% |
0.98 |
% |
7.13 |
% |
Canada |
$ 23,745 |
2.04 |
% |
1.12 |
% |
5.76 |
% |
Major City Analysis – Debt (excluding
mortgages) & Delinquency Rates
City |
Average Debt (Q2 2019) |
Average Debt Change Year-over-Year (Q2 2019 vs. Q2 2018) |
Delinquency Rate (Q2 2019) |
Delinquency Rate Change Year-over-Year (Q2 2019 vs. Q2 2018) |
Calgary |
$29,981 |
0.40 |
% |
1.30 |
% |
11.30 |
% |
Edmonton |
$28,787 |
1.40 |
% |
1.49 |
% |
4.40 |
% |
Halifax |
$23,662 |
-0.30 |
% |
1.54 |
% |
6.70 |
% |
Montreal |
$17,963 |
2.00 |
% |
1.19 |
% |
-1.20 |
% |
Ottawa |
$22,884 |
1.90 |
% |
0.92 |
% |
-1.50 |
% |
Toronto |
$23,371 |
3.70 |
% |
1.18 |
% |
8.00 |
% |
Vancouver |
$26,778 |
1.30 |
% |
0.75 |
% |
12.40 |
% |
St. John's |
$25,456 |
0.20 |
% |
1.70 |
% |
11.50 |
% |
Fort McMurray |
$39,466 |
1.30 |
% |
1.75 |
% |
3.60 |
% |
Province Analysis - Debt (excluding mortgages)
& Delinquency Rates & Bankruptcy Amount
Province |
Average Debt (Q1 2019) |
Average Debt Change Year-over-Year (Q1 2019 vs. Q1 2018) |
Delinquency Rate (Q1 2019) |
Delinquency Rate Change Year-over-Year (Q12019 vs. Q1 2018) |
Ontario |
$24,333 |
3.3 |
% |
1.00 |
% |
7.8 |
% |
Quebec |
$19,672 |
2.2 |
% |
0.99 |
% |
-0.3 |
% |
Nova Scotia |
$22,622 |
-0.3 |
% |
1.77 |
% |
3.5 |
% |
New Brunswick |
$23,725 |
0.8 |
% |
1.83 |
% |
7.2 |
% |
PEI |
$23,210 |
1.4 |
% |
1.31 |
% |
0 |
% |
Newfoundland |
$23,920 |
0.1 |
% |
1.84 |
% |
11.1 |
% |
Eastern Region |
$23,287 |
0.2 |
% |
1.77 |
% |
6.2 |
% |
Alberta |
$29,390 |
0.9 |
% |
1.43 |
% |
7.9 |
% |
Manitoba |
$18,921 |
0.2 |
% |
1.38 |
% |
6.1 |
% |
Saskatchewan |
$24,877 |
-1.5 |
% |
1.52 |
% |
4.2 |
% |
British Columbia |
$25,031 |
1.2 |
% |
0.89 |
% |
7.7 |
% |
Western Region |
$25,951 |
0.7 |
% |
1.20 |
% |
7.1 |
% |
Canada |
$23,745 |
2.0 |
% |
1.12 |
% |
5.8 |
% |
About Equifax Inc.Equifax is a global data,
analytics, and technology company and believes knowledge drives
progress. The Company blends unique data, analytics, and technology
with a passion for serving customers globally, to create insights
that power decisions to move people forward. Headquartered in
Atlanta, Equifax operates or has investments in 24 countries in
North America, Central and South America, Europe and the Asia
Pacific region. It is a member of Standard & Poor's (S&P)
500® Index, and its common stock is traded on the New York Stock
Exchange (NYSE) under the symbol EFX. Equifax employs approximately
11,000 employees worldwide. For more information, visit Equifax.ca
and follow the company’s news on Twitter and LinkedIn.
Data for the Equifax Canada 2019 Q2 National
Consumer Credit Trends Report, including scores, is sourced from
Equifax Canada, the repository of the majority of credit
transactions that occur in Canada. There are over 25 million unique
Equifax Canada consumer credit files. Transaction volumes for data
are estimated at 105 million per month. Information provided in
this report was adjusted to ensure that quarterly data reflects the
results as of the last month of each quarter.
The information in this press release is
published by Equifax Canada Co. © 2019 All rights reserved. This
press release is for informational purposes only and is not legal
advice and should not be used, or interpreted, as legal advice. The
information is provided as is without any representation, warranty
or guarantee of any kind, whether express or implied. Equifax will
not under any circumstances be liable to you or to any other person
for any loss or damage arising from, connected with, or relating to
the use of this information by you or any other person. Users of
this informational publication should consult with their own lawyer
for legal advice.
Andrew FindlaterSELECT Public Relations(416)
659-1197
Graphs accompanying this announcement are available
athttps://www.globenewswire.com/NewsRoom/AttachmentNg/940b0402-f9e4-4dc6-9f25-1def08c4cd3ahttps://www.globenewswire.com/NewsRoom/AttachmentNg/9a56e260-2c1f-4f5e-a6fa-676b065cb36d
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