March 12, 2018 7:12 pm

Vancouver, Toronto residents digging into debt faster than any Canadians, data shows

Left, Toronto's CN Tower. Right, condo buildings along Vancouver's False Creek.

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Call it a tie — Vancouver and Toronto residents racked up non-mortgage debt faster than any other major Canadian cities in the fourth quarter of 2017, according to data provided by consumer credit reporting agency Equifax Canada.

The data, released Monday, showed each city racking up average debt at a rate of 5.2 per cent year over year, which was almost double the rate of the next closest city, Ottawa, at a rate of 2.3 per cent.

Coverage of debt on Globalnews.ca:

However, one city appears to be doing a better job of paying off its bills than the other one.

Vancouver registered a delinquency rate of 0.68 per cent in the fourth quarter, a drop of 11.4 per cent from the same quarter last year.

Toronto’s delinquency rate, meanwhile, was 1.12 per cent, which was down 9.8 per cent year-over-year.

READ MORE: Vancouverites are, on average, Canada’s most indebted people in major cities, data shows

The high growth of debt and the low delinquency rate were functions of a strong economy, said Regina Malina, senior director of decision insights at Equifax Canada.

“We usually see the correlation of when the unemployment rate is low, the mood of consumers is positive, that debt levels sometimes are going up,” she told Global News.

“We saw the same thing in Alberta pre-oil patch situation.”

When economies are strong, people feel like they have more buying power, Malina said.

In Vancouver’s case, much of the non-mortgage debt growth is being driven by instalment and auto loans, she added.

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And that’s consistent with what’s happening across Canada.

Instalment loans (10.3 per cent) and auto loans (6.5 per cent) saw the most significant increases among any kind of debt in the fourth quarter, year over year, Equifax Canada said.

But Vancouverites didn’t have the highest average debt balances.

The winner in that category was Fort McMurray, with an average non-mortgage balance of $38,359.

The oilsands mecca was followed by Calgary ($29,478), Edmonton ($27,241), Vancouver ($25,763) and St. John’s ($25,543).

READ MORE: Canadian consumer debt just keeps growing — but here’s why it’s not a problem yet

Those results contrasted with findings released by credit reporting agency TransUnion earlier this month.

That agency found that Vancouverites had, far and away, the highest average non-mortgage consumer debt of people in any major city considered in its report.

In that report, Vancouverites held an average non-mortgage consumer debt balance of $38,588 in the fourth quarter of 2017, just edging out Calgary, where the average balance was $38,254.

Equifax Canada derives its data by looking at credit information held by banks, based on the financial products that they provide to customers, Malina said.

Apartment buildings in downtown Vancouver, on the north shore of False Creek, Vancouver, B.C.

Douglas Williams/CP

B.C. also showed a healthy delinquency rate, hitting 0.85 per cent, lower than any other province in Canada in the fourth quarter.

That rate represented a 10.6 per cent drop from last year.

And that, too, could be attributed to a strong economy, Malina said.

READ MORE: Equifax didn’t do enough to protect Canadians in data breach, MPs say

However, there are signs that B.C.’s economic strength could weaken this year.

A provincial economic outlook released by RBC in December 2017 showed the province’s GDP growth slowing to 2.3 per cent, down from 3.2 per cent in 2017.

B.C.’s economy is expected to pick up again slightly in 2019, to 2.5 per cent.

Equifax’s report came months after it emerged that over 19,000 Canadians were affected by a data breach at the company that compromised their personal information.

John Russo, chief privacy officer for Equifax Canada, apologized to Canadians for the breach in an appearance before the Commons committee on information, privacy and ethics.

  • With files from Maham Abedi

© 2018 Global News, a division of Corus Entertainment Inc.

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