A new report released Thursday shows debt levels in Alberta are on the rise.
An Equifax Canada report shows that delinquency rates in Edmonton were 21.3 per cent higher in the final quarter of 2015 than during the same quarter of 2014. The average debt in Edmonton stands at $26,479. There was no budge in the national delinquency rate.
Debt delinquency means a consumer is unable to make any type of payment on his or her debt.
The delinquency rate in Calgary is 17 per cent higher than the same period in 2014. According to the report, Calgarians hold an average debt of $28,421. The average debt, excluding mortgages, held by a Canadian is $21,458.
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Sandra Landry, a licensed insolvency trustee with MNP Debt, said the report is, unfortunately, not surprising.
“A lot of the work here in Alberta is related to the oilfield and as everyone knows, that’s now slowing down,” she said.
Landry said some people are making different types of choices when it comes to their personal finances.
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“They’re looking at paying a mortgage instead of paying a credit card payment because foreclosure is imminent. We’re seeing a lot more of the personal assets being seized, whether it’s boats, trailers, vehicles. People simply just allow it to happen because they don’t have any other choices,” she said.
Landry said Albertans are slowly learning how to live within their new means.
“For the next little while, I think it absolutely is going to become the norm,” she said.
The Alberta cities have some of the highest debt delinquency rates amongst cities across Canada. In comparison, debt delinquency rates in Toronto and Vancouver fell seven per cent from 2014 to 2015.
Provincially, the outlook is grim. Alberta saw a jump of 25.1 per cent in debt delinquency at the end of 2015, with an average debt of $27,576. The province with the next highest jump in debt delinquency is Saskatchewan, with a 14 per cent change and an average debt of $23,941.
“Oil-producing western provinces such as Alberta and Saskatchewan and Newfoundland and Labrador in the eastern region are currently trending upwards, especially over the past three quarters,” the report states.
Ian Wallace, a credit counsellor with the Credit Counselling Society, said there has been a 29 per cent jump in the province in the number of clients turning to the society for help.
Wallace said Albertans need to have honest conversations about their finances.
“Debt is something people don’t like to talk about. It’s an elephant in the room that everyone wants to ignore,” he said.
But Wallace said it is imperative to have that conversation in order to sort out personal finances.
“Have a conversation about all the debts that you have, all the interest rates you have. What are your payments per month? The second step is you really have to sit down and work out an honest budget for yourself,” he said.
Wallace said people talk in broad terms about their mortgage payments, grocery bills, insurance payments and gas purchases. But he said it’s the little things that can add up, such as buying coffee every morning for work.
“You have to sit down and do a very detailed budget assessment of exactly how your dollar is being spent in the house. Then you can figure out what can you cut, what can we prioritize and then how do we pay back our debt?” he said.
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