Average non-mortgage debt dropped 0.5% in Q1

Saskatchewanians had the biggest decrease in consumer debt loads in the first quarter, according to data from Equifax Canada.

The province’s average consumer debt load — which excludes mortgage debt — decreased by 2.44% vs 2019 to an average of $24,247 per person.

Across Canada, average non-mortgage debt per person dropped by 0.5% in the first quarter — the first decline in more than a decade, Equifax reported.

“With stores and restaurants shut down, consumers were able to cut back on their spending in March as retail sales numbers indicated,” Bill Johnston, Equifax Canada’s vice president of data and analytics, said in a statement.

The result, Johnston said, was a “plunge” in credit card spending that translated into lower balances — a trend that continued in April.

The number of consumers looking for new credit “dropped significantly” in mid-March and early April, although Equifax noted that credit demand has increased in recent weeks, led by mortgage and auto financing.

Although Saskatchewan was the province with the biggest drop in debt loads, Halifax was the city with the biggest decline in consumer debt, which was down 2.03% vs 2019 to an average of $23,094 per person.

Quebec was the province with the largest increase in consumer debt, which rose by 0.4% vs last year to an average of $19,488 per person.

Although Alberta saw consumer debt decrease significantly — by 1.72% — Fort McMurray was the municipality with the highest increase in debt. Consumer debt rose by 1.23% in Fort Mac to an average of $39,488 per person.

The 90-day delinquency rate in Fort McMurray also spiked, up 7.89% vs 2019. Delinquency rates skyrocketed in Calgary and Toronto — increasing by 13.36% and 12.69%, respectively.

Johnston noted that Equifax expects “delinquencies and bankruptcies to rise in the latter part of the year.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.