Equifax Canada’s report on National Consumer Credit Trends points to ballooning debt levels in Canada as consumer debt, which includes mortgages, reached $1.529 trillion in the fourth quarter of 2014.
It’s a 1.1 per cent increase over the previous quarter and a 7.7 per cent jump over Q4-2013. Equifax found that the surge in debt was driven largely by instalment and auto loans.
The data company also found that if you exclude mortgage debt, the average debt held by Canadians is now $20,967, an increase of 2.9 per cent.
Consumer demand for new credit was mostly driven by credit cards when comparing the fourth quarter of 2014 to the same time last year. However, there was also a boost in bank and auto inquiries.
Canada-wide, demand for new credit rose 8.5 per cent year-over-year in the fourth quarter. The West had the biggest interest among the regions with demand rising 11.7 per cent from 2013.
Despite the seemingly insatiable appetite for credit, the report noted that the national 90+ delinquency rate in all regions and major cities of Canada has largely remained the same. Last quarter, the national 90+ delinquency rate reached 1.09 per cent, the lowest amount since 2008.
Equifax did have some words of warning for increasingly-in-the-red Canadians.
“The rapid decline in oil prices caught many by surprise. And, that’s the point – consumers and business owners need to be more vigilant,” said Regina Malina, senior director of decision insights at Equifax Canada.
“When economic change happens, it can happen very quickly and can challenge previously observed stability of key economic and credit indicators.”