TORONTO, ONTARIO--(Marketwired - Feb. 9, 2014) - Despite a consumer debt load now ticking up to $1.422 Trillion nationally, Equifax Canada's Q4 2013 National Consumer Credit Trends Report also found that the national delinquency rate reached a new record low at 1.12 per cent.
"The growing debt is an important indicator of the state of consumer financial health, and should not be dismissed," explained Regina Malina, Director, Modeling and Analytics, Equifax Canada in reference to the consumer debt. "But for the most part, consumers and lenders continue to be responsible in how they're using credit. In short, monthly payments are being made."
Total consumer debt reported to Equifax moved up by 4.5 per cent from $1.36 Trillion as of Q3 2013. On a debt classification basis, two levers pushing numbers higher are Installment Loans and Credit Card sectors with significant increases of 11.0 per cent, and 5.9 per cent year-over-year, respectively.
Cristian deRitis, Senior Director of Consumer Credit Economics at Moody's Analytics, commented on the Equifax report adding "that the consumer debt certainly raises eye brows. It's a number that seems to defy gravity. Debt service ratios, however, are stable indicating that most households have adequate income to service their debts."
Mr. deRitis further noted, "Consumer credit trends are expected to remain strong throughout the year as an expanding U.S. economy increases demand for Canadian exports. Interest rates are expected to remain relatively low throughout 2014, rising gradually in 2015 and 2016 as both the Canadian and U.S. economies gather steam. This transition period should allow consumers to adjust their spending habits while continuing to make their debt payments."
On a regional basis, Quebec has the lowest delinquency rate (0.98 per cent) on non-mortgage loans, while the Eastern region has the highest rate (1.42 per cent).
| 90 days or more Delinquency Rate |
|
|
|
|
| Region |
Q4 2012 |
Q1 2013 |
Q2 2013 |
Q3 2013 |
Q4 2013 |
| Ontario |
1.37% |
1.37% |
1.35% |
1.28% |
1.23% |
| Quebec |
0.97% |
1.00% |
0.99% |
0.96% |
0.98% |
| West |
1.07% |
1.08% |
1.06% |
1.00% |
1.01% |
| East |
1.47% |
1.50% |
1.51% |
1.42% |
1.42% |
| Canada |
1.19% |
1.20% |
1.19% |
1.13% |
1.12% |
Payment performance was strongest in Calgary and Edmonton with less than 1 per cent of loans delinquent by 90 days or more. Toronto registered the worst performance among major cities with a delinquency rate of 1.5 per cent.
Continuing to look at major cities and average debt, Edmonton incurred the highest year-over-year increase of 5.3 per cent. Also of note, the average debt in Vancouver decreased substantially by 4.4 per cent.
| Average Debt - % Change Year- Over-Year |
|
| % Changes Year- over-Year |
Q4 2012 |
Q1 2013 |
Q2 2013 |
Q3 2013 |
Q4 2013 |
| Calgary |
-1.4% |
2.1% |
3.6% |
3.8% |
1.9% |
| Edmonton |
-0.2% |
5.0% |
6.4% |
7.5% |
5.3% |
| Vancouver |
4.3% |
3.2% |
2.0% |
-0.3% |
-4.5% |
| Montreal |
3.3% |
3.5% |
4.6% |
4.1% |
2.3% |
| Ottawa |
3.1% |
2.6% |
4.2% |
3.3% |
2.1% |
| Toronto |
1.2% |
0.7% |
2.4% |
1.6% |
0.0% |
| Halifax |
3.7% |
2.5% |
3.3% |
2.8% |
3.0% |
About Equifax
Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 600 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or have investments in 19 countries and is a member of the Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange under the symbol EFX.
For more information, please visit www.equifax.ca.