The average non-mortgage total debt of Canadian consumers rose once again last quarter, continuing the trend of the highest debt levels seen to date.
According to a report by credit analysis company TransUnion, the average consumer’s total debt (excluding mortgages) rose by $192 in the second quarter of 2012 to $26,221, a 0.74 percent increase compared to the previous quarter, and a 2.41 percent rise compared to the same quarter last year.
Auto loan debts had the highest rate of increase compared to other credit products, with a rise of 13.25 percent compared to Q2 last year, and 3.67 percent compared to Q1 this year.
The average credit card borrower debt declined by 0.93 compared to the same quarter last year, but increased by 2.7 percent compared to the previous quarter this year. Lines of credit and installment loan borrower debts also increased in Q2 2012 by 0.4 percent and 0.95 percent compared to Q2 2011, and 1.13 percent and 2.37 percent compared to Q1 2012, respectively.
Despite the growth in debt, delinquency levels remained low across all major product categories, with auto loans having the highest year-to-year drop in delinquency at 15.52 percent.
“We are in a unique situation because while it is somewhat disconcerting to see average consumer total debt reach its highest level since we’ve been tracking this variable, Canadian consumers appear to be able to manage this debt as delinquency levels have dropped across all of the major credit vehicles,” Thomas Higgins, TransUnion’s vice president of analytics and decision services, said in a press release.
“It’s quite possible that this is a trend that will continue as consumers take advantage of the low interest environment. However, if there are any sudden economic shifts such as a significant rise in unemployment, then it’s quite conceivable that delinquencies will rise with debt levels,” Higgins said.
The rise in average debt was more or less consistent throughout Canada, with all provinces except Saskatchewan showing an increase in debt levels compared to the previous quarter, and all except Alberta showing increases compared to the previous year.
This was the third consecutive quarter that Alberta had a decrease in debt levels compared to the previous year.
Unlike debt levels, consumer bankruptcies continued to fall after their increase to record levels in 2009, though in Q2 the rate of decline dropped to single digit at 8.9 percent compared to the previous quarter and 8.94 compared to the previous year.
Last year, Ontario had the highest decrease in bankruptcies at 22.64 percent compared to the previous year, and Quebec had the lowest decrease at 8.8 percent.
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