Total consumer debt has climbed to $2.32 Trillion according to our latest consumer credit trends report/study– an increase of 8.2 percent in Q2 2022 compared to last year. The rise of new lending and higher spending is linked to inflation, increasing the average consumer debt. Data provided by Equifax breaks down the average debt per province for Q2 2022 along with its year-over-year change. 

The Factors Affecting Debt Levels

Across Canada, the cost of living is increasing due to rising inflation. Essential expenses such as housing, energy, and other goods and services are more expensive for consumers as a result. This increase in living expenses for Canadians has a direct effect on financial stress. Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada states that this stress on “consumer credit is not just visible in day-to-day credit card spending, but also in other non-mortgage debt like auto loans and lines of credit, where balances are on the rise.”

Over the last quarter, credit card balances rose to the highest level since Q4 2019 and increased by 6.4 percent compared to the Q1 figures. The biggest shift in consumer credit balance has been on those with lower credit scores, who may have a higher risk of missing payments. A greater reliance on credit cards and increased spending could also lead to missing payments among consumers. 

Provincial Analysis of Debt and Delinquency 

Increases in new lending and higher spending linked to inflation have pushed non-mortgage debt to $591.4 Billion, up 5.2 percent from Q2 2021. The average debt per province in Canada is $21,218. Below is a breakdown of the three highest debt levels per province for Q2 2022. 

• Alberta had an average debt of $25,056. 

• Newfoundland had an average debt of $22,909.

• PEI had an average debt of $22,239. This is a 1.11% increase year-over-year. 

• Saskatchewan had an average debt of $22,582. They also have the highest delinquency rate of 1.26%. 

• British Columbia had an average debt of $21,940. 

An analysis of average debt for all provinces, age groups, and major cities can be found in the latest Equifax Canada Press Release ‘Financial Stress Mounts, Credit Card Demand and Debt Rise’. 

Outlooks to Keep in Mind

As credit card demand and balances continue to increase, delinquency rates should be monitored. Over the last quarter, credit card balances rose to the highest level since Q4 2019 and increased by 6.4 percent compared to the Q1 figures. The biggest shift in consumer credit balance has been on those with lower credit scores, who may have a higher risk of missing payments. Oakes advises that “the rapid rise in inflation and interest rates is clouding the economic outlook. Early indications in our data suggest financial stress is starting to emerge; Canadians should continue to be mindful of their spending and debt obligations.” Understanding the average debt of various provinces and their trends within the current economy can aid in lending decisions. 

We want to help Canadians live their financial best. To learn more about understanding our consumer credit and debt trends, please contact your Equifax Account Representative. You can also reach us directly at 1-855-233-9226 and follow us on Twitter and LinkedIn.  

This article is published by Equifax Canada Co.® 2022. All rights reserved. No part of this article may be reproduced, copied, or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of Equifax Canada Co. This article is for informational purposes only and is not intended to be legal or business advice.