Canada: Total Outstanding Consumer Debt Tops $2 Trillion
Continued growth in the housing market and new auto loans led the way in driving total consumer debt up by 3.8% to $2.041 trillion in the third quarter, according to Equifax Canada’s most recent report on consumer credit conditions.
- Mortgage balances increased by 6.6% in contrast to Q3 of 2019 and the average new mortgage loan amount surpassed $300,000 for the first time, an increase of 8.6%.
- Despite the pandemic, new auto loans were also up 11.7% compared to the same period last year.
- Average credit card spending returned close to pre-COVID levels during the quarter, but an increase in average payment amount led to overall credit card debt remaining similar to Q2 levels.
“Homebuyers are largely the reason why we’ve crossed over the $2 trillion threshold,” said Rebecca Oakes, AVP of Advanced Analytics at Equifax Canada.
“Car sales have also rebounded in the last few months. With manufacturer and auction house shutdowns there has been a temporary shortage of vehicle availability in some areas. This in turn has led to an increase in car prices as demand exceeds supply. Speculation in the sector suggests the pandemic may also be impacting car demand in the short term as consumers switch away from public transportation. Average auto loan amounts have increased to their highest level in four years.”
Deferrals and delinquencies during the pandemic
Over 3 million consumers opted for payment deferrals at some point since the pandemic started. Improvements in the job market combined with some consumers reaching the end of agreed lender deferral periods has led to less than half still having an active deferral at the end of September. Deferral accommodations have not stopped consumers from seeking new credit; approximately 12 per cent of new credit products in Q3 2020 were opened by consumers who had some form of deferral on their credit file.
The 90+ day delinquency rate (the percentage of balances where credit users have missed 3+ payments) for non-mortgage debt dropped to 0.98 per cent – the lowest level since 2014 (down 15 per cent compared to Q3 2019).
“The low delinquency rates we’re currently seeing are likely being masked by deferral programs,” said Oakes. “There are some warning signs in early-stage delinquency on credit cards where consumers have missed one or two payments that we’re closely monitoring. Typically, consumers prioritize their debt repayments in a certain order and credit cards are often the first to see missed payments when there are difficulties. The largest increase in this area is coming from people who have exited payment deferral programs in July, so potentially these could be individuals feeling greater financial stress because of COVID.”
Debt (excluding mortgages) & Delinquency Rates
| Age | Average Debt (Q3 2020) |
Average Debt Change Year-over-Year (Q3 2020 vs. Q3 2019) |
Delinquency Rate (Q3 2020) |
Delinquency Rate Change Year-over-Year (Q3 2020 vs. Q3 2019) |
| 18-25 | $8,715 | 0.10% | 0.96% | -41.06% |
| 26-35 | $17,897 | -2.29% | 1.22% | -26.32% |
| 36-45 | $28,034 | -3.15% | 1.12% | -15.24% |
| 46-55 | $35,520 | -1.96% | 0.91% | -8.37% |
| 56-65 | $29,782 | -1.98% | 0.81% | -7.50% |
| 65+ | $16,133 | -2.85% | 0.94% | -6.60% |
| Canada | $23,237 | -2.39% | 0.98% | -15.08% |
Major City Analysis – Debt (excluding mortgages) & Delinquency Rates
| City | Average Debt (Q3 2020) |
Average Debt Change Year-over-Year (Q3 2020 vs. Q3 2019) |
Delinquency Rate (Q3 2020) |
Delinquency Rate Change Year-over-Year (Q3 2020 vs. Q3 2019) |
| Calgary | $29,107 | -2.58% | 1.17% | -11.71% |
| Edmonton | $27,633 | -2.85% | 1.40% | -10.13% |
| Halifax | $22,873 | -3.17% | 1.08% | -29.78% |
| Montreal | $17,167 | -4.68% | 1.06% | -12.43% |
| Ottawa | $22,076 | -3.36% | 0.79% | -18.39% |
| Toronto | $23,108 | -1.65% | 1.05% | -14.37% |
| Vancouver | $26,206 | -1.96% | 0.67% | -14.60% |
| St. John's | $25,201 | -1.69% | 1.29% | -27.06% |
| Fort McMurray | $39,811 | -0.07% | 1.66% | -13.24% |
Province Analysis - Debt (excluding mortgages) & Delinquency Rates & Bankruptcy Amount
| Province | Average Debt (Q3 2020) |
Average Debt Change Year-over-Year (Q3 2020 vs. Q3 2019) |
Delinquency Rate (Q3 2020) |
Delinquency Rate Change Year-over-Year (Q3 2020 vs. Q3 2019) |
| Ontario | $24,000 | -1.63% | 0.88% | -14.82% |
| Quebec | $19,097 | -3.83% | 0.87% | -13.48% |
| Nova Scotia | $22,198 | -2.12% | 1.32% | -27.27% |
| New Brunswick | $23,490 | -1.70% | 1.42% | -23.77% |
| PEI | $23,069 | -0.76% | 0.90% | -32.83% |
| Newfoundland | $23,867 | -1.01% | 1.40% | -25.59% |
| Eastern Region | $23,018 | -1.66% | 1.34% | -26.02% |
| Alberta | $28,405 | -2.66% | 1.32% | -10.75% |
| Manitoba | $18,411 | -2.99% | 1.21% | -16.65% |
| Saskatchewan | $24,227 | -2.85% | 1.30% | -16.85% |
| British Columbia | $24,504 | -2.12% | 0.80% | -14.02% |
| Western Region | $25,250 | -2.47% | 1.09% | -13.15% |
| Canada | $23,237 | -2.39% | 0.98% | -15.08% |
* Based on Equifax data for Q3 2020