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Consumer appetite for credit grows as total debt climbs to $1.718 trillion: report


March 15, 2017
By Canadian Pizza

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Toronto – Total consumer debt held by Canadians (including mortgages) now stands at $1.718 trillion, an increase of six per cent compared to the final quarter of 2015, according to Equifax Canada’s National Consumer Credit Trends Report.

The report also indicates that while almost half of consumers are decreasing their debt, those that are still increasing it (37 per cent) are adding a larger amount on average. On a debt classification basis, auto loans and installment loans are showing significant increases of 7.9 per cent and 7.8 per cent year-over-year, respectively. Another key contributor is the mortgage sector.

“Demand for credit is increasing in Ontario, New Brunswick and Nova Scotia,” said Regina Malina, senior director of Data & Analytics at Equifax Canada. “It’s too early to call it a trend, but there’s also a renewed appetite for credit in Western Canada. All four provinces saw increased credit inquiries at the end of 2016.”

Debt, meanwhile, is increasing among seniors (+6.1 per cent) and with consumers with better risk scores (+5.1 per cent). The highest risk group did not grow significantly (+0.2 per cent), the lowest increase since Q4 of 2013. 

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Delinquencies continue to climb in the oil patch provinces of Alberta, Saskatchewan and Newfoundland. Eastern and Western regions have been leading the way in terms of delinquency after the Western region lost its place as the lowest delinquency region at the end of 2015. Credit card delinquency rates have been increasing all of 2016. By contrast, the auto delinquency rate decreased (-4.9 per cent) for the first time since Q2 of 2012.