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Delinquency rates for non-mortgage loans on the rise in Canada: TransUnion

TransUnion figures suggest Canadians are piling on more debt amid ultra low interest rates.
TransUnion figures suggest delinquency rates for non-mortgage loans are on the rise in Canada. JONATHAN HAYWARD/Canadian Press

OTTAWA – Delinquency rates for non-mortgage loans are on the rise in Canada and it appears the problem can be linked to trouble in the oilpatch, according to credit monitoring agency TransUnion.

TransUnion says the ratio of accounts 90 or more days past due increased to 2.52 per cent in the first three months of the year from 2.45 per cent in the same period a year ago.

However, in Alberta, hard hit by the downturn in oil prices, the rate increased to 2.8 per cent from 2.5 per cent a year ago, while in Saskatchewan, the rate increased to 3.04 per cent from 2.88 per cent.

Meanwhile, rates in British Columbia ticked lower to 2.43 per cent from 2.47 per cent and Ontario improved to 2.57 per cent from 2.59 per cent.

“When it comes to loan default rates, we are looking at two distinct groups: oil-sector provinces and the rest of the country,” said Jason Wang, TransUnion’s director of research and analysis in Canada.

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“We continue to see material delinquency increases in the oil provinces and we suspect that it will continue over the next few quarters.”

The increase in the national delinquency figures came as the average Canadian’s non-mortgage debt level grew to $21,348 compared with $20,785 a year ago.

TransUnion noted that debt levels were up for auto loans, credit cards and instalment loans. However, lines of credit were lower.

Wang said average balances haven’t moved much on an overall basis.

“But once we segment by risk tiers, we find a gradual shift where subprime consumers are increasing their share of the debt load relative to the low-risk population,” he said.