December 2, 2015 2:15 pm

Alberta still has the highest consumer debt in Canada

WATCH ABOVE: There is no doubt times are tough across Canada, especially here in our province where thousands of people in the energy sector have been laid off. Now more than ever, it’s important to know how to plan financially. Personal finance and debt expert, Freida Richer joined the Morning News to talk about what you can do to put yourself in a better situation for now and the future.


OTTAWA — Canadians in oil-producing provinces are having a harder time paying their bills, even as the national delinquency rate improves to its lowest level in more than six years.

A report released by consumer credit monitoring firm Equifax shows Alberta’s consumer debt is still the highest in Canada, sitting at $27,490, more than $6,000 above the national average.

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Edmonton’s average debt, excluding mortgages, was $26,420. It was the second highest in the country after Calgary, where the average debt was $28,355.

READ MORE: Debt hits new all-time high among Canadian households

The number of people filing bankruptcies also increasing in Alberta.

Conversely, the national 90-day delinquency rate, excluding mortgages, slipped to 1.05 per cent, down from 1.10 per cent a year ago and the lowest since Equifax began reporting the figures.

Regina Malina, senior director of decision insights at Equifax Canada, says the average delinquency rate for Western Canada is below the national average, but it is rising.

Equifax says the rates in Alberta, Saskatchewan, Manitoba rose 13.4 per cent, 8.5 per cent and 3.7 per cent respectively.

READ MORE: Albertans owe the most with average debt burden of $27,300

The delinquency rate in Newfoundland and Labrador was up 5.8 per cent from a year ago.

“Delinquency rates are an indicator that we follow closely and we are now seeing a negative effect in Western Canada,” Malina said.

“The same holds true in Newfoundland — essentially anywhere in the country where the economy is impacted by oil.”

Total consumer debt amounted to nearly $1.59 trillion, with nearly two-thirds of that accounted for by mortgage debt. The total borrowing was up from nearly $1.57 trillion in the second quarter of 2015 and $1.51 trillion a year ago.

Excluding mortgages, average national consumer debt was $21,312 in the third quarter, up from $21,164 in the second quarter and $20,891 a year ago.

READ MORE: Cash crunch ‘inevitable’ for Canadian households deep in debt: report

Borrowing by Canadians and their ability to pay back their debts have been cited as a key risk for the economy.

Record low interest rates have helped make it easier for Canadians to borrow more and helped fuel the housing market.

However, worries have been raised about what will happen when interest rates eventually start to go up.

“Consumer debt levels continue to rise and those numbers are sure to increase following the holidays,” Malina said.

“However, despite other market research we’ve seen predicting a boom in spending over the holidays, we expect most Canadians will continue to manage their spending wisely. Demand for new credit has eased off.”

With files from Karen Bartko, Global News

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