Consumer debt hits $1.8trn in 2017 – Equifax

Consumer debt hits $1.8trn in 2017 – Equifax

Consumer debt hits $1.8trn in 2017 – Equifax

Total debt held by Canadian consumers reached new highs last year – but delinquencies and bankruptcies went down, according to the latest figures from Equifax Canada.

Including mortgages, Canadian consumers owed $1.8trn at the end of December 2017 – that’s 6% higher from a year before, and 1.3% higher from the previous quarter. In particular, Equifax said the instalment loan, auto loan and mortgage sectors are showing significant increases of 10.3%, 6.5% and 6.2% year-over-year, respectively.

The average debt held by Canadians went up 3.3% to $22,837 per person.

Despite the high debt levels, data also showed that 46% of consumers decreased their debt during the fourth quarter of 2017, compared to 37% who increased their debt. Mortgage payments were generally on time as well, according to Regina Malina, senior director of decision insights. She attributed the improvement to low unemployment numbers and mortgage and auto finance interest rates which are still at “historically low and reasonable levels.”

“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,” Malina added.

Delinquency decreased across all age groups, but most noticeably among those under the age of 25. “Millennials have had the highest delinquency rates in terms of age, but we’ve seen a nine per cent reduction in their delinquency rate from a year ago,” Malina said. “Their overall debt has continued to increase, but they seem to be handling their payments better. This situation stresses the importance of financial literacy of younger Canadians. Once again, however, the debt of older Canadians also continues to rise perhaps suggesting Millennials are getting some help.”

 

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1 Comments
  • 530270 2018-03-15 1:33:15 PM
    The Average debt of Canadian Consumers is rising, which is indeed a cause for alarm! However, this rise is the result of a couple of factors:
    1. Mortgage Debt Levels are spiking because the Government Of Canada has to be conscious of incoming Immigration of families who cannot live on the street once they have landed in Canada. Every Immigrant needs a roof over their head to survive the frigid wintery conditions of this land located close to the Geographical Tundra. Hence it is squarely the job of the Political Government in Office to increase the supply of land and aggressively construct affordable houses for all those who need them urgently. This could have very easily prevented the hot headed bidding wars that shot the price of a house into the sky.
    2. It is strange to see a Country like Canada welcoming immigrants and not being able to provide them industries & Sectors in which they can be gainfully employed. Most Immigrants come with knowledge, experience and a brain( Besides a bit of Capital for sustenance till they are employable in the New Country). Their infusion into the Canadian Economy is being ignored purposefully. The Retirement policy of Heads of Institutions must be strictly enforced so that they do not JOB HOGG and thus deny more able incumbents from occupying their coveted role in the company.
    3. The TSX displays: the Lumber Industry+ Institutional Banking+ Mining Industry ( Includes Oil Extraction)+ Prarie Farming+ Services Sector ( Includes Civil services)+ Building & Construction + Industrial Assembling of Motor Parts as the only employable sectors of the Economy. Canada does not even build its own brand of Vehicles! The Toronto Stock Exchange is out of date with sector concentration, killing it's purpose.
    4. Many more Sectors exist in any Emerging or Developed Economy. This enables creation of jobs and income. Canada does not create jobs, the statistics rotates jobs from part time to full time and then to those fed up of job search!
    5. If a Citizen of Canada pays his/her Income tax + HST ( Consumption tax)+ Pays for the Mortgage on the house they live in, he/she will have less money to enjoy Canada, as the best place to live in the World.
    6. The Only entities which stand to gain from the High Debt Levels are: 1.The Mortgage Lending Institutions of Canada and the Canada Revenue Agency.
    7. There has got to be a wake up call for the Government of Canada to administer this country for the benefit of it's Citizenry. They must stop making the rich richer and ignore those struggling to integrate into this Economy on which they now come to depend on. The aggressive blue blood lobby groups have taken their pound of flesh along with the blood, for far too long in Canada! Canada is no longer a village economy. If it considers itself in the G 7 Nations, it needs to pull up its economy to benefit all, not just some. It can no longer cry wolf to NAFTA or unfair trade practices. It must grow larger on its own might. The Might of the people who have immigrated along with the Indigenous Red Indians, who inherit this very dynamic land.
    8. Conclusion: The Government of Canada has stood silently by and done stark nothing to solve this high debt level crisis. It must act more magnanimous and create realistic policies which make Canada Great.
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