Ranking Canadian provinces by consumer debt levels

A good number of Canadians resort to borrowing to be able to fund different needs. These debts are typically to finance investments in various ventures, obtain a new property, acquire goods and services, or cater to pressing demands. 

On average, a Canadian assumes roughly $22,125 in non-mortgage debt, including credit cards and several lines of credit. In recent years, mortgage debt and consumer debt have both risen notably. 

What Is Consumer Debt? 

Consumer debt comprises individual debts resulting from borrowing to acquire goods or services for personal or household expenditures. Examples of consumer debts include:

  • Payday loans
  • Mortgages
  • Credit card debts
  • auto loans 
  • Student loans 

Debts sustained through government business deals or ones used to fund investments in operating an enterprise are not consumer debts. 

Consumer loans can come from the federal government, credit unions, or a bank. 

There are two classes of consumer debt: revolving debt and non-revolving debt. Revolving debts are debts paid down monthly, while non-revolving debts involve a huge loan upfront with payments set over an established period. 

Consumer Debt Levels in Canada 

According to data shown by credit report bureau Equifax, the first three months of the year recorded an all-time high demand for Canadians’ credit. There was a 3.6 percent rise in credit demand, with gross debt climbing higher than 6 percent to more than $1.8 trillion.

Furthermore, a climb in mortgage balances raised average debt per person to $73,532, up 2.2 percent from a year ago, despite the impact of the COVID-19 pandemic on the economy. 

Restrictions caused by the COVID-19 pandemic in the country affected auto loans, credit cards, and credit lines, thereby reducing non-mortgage debt by up to three percent nationwide. 

The national delinquency rate rose to 1.19 percent for non-mortgage debt despite obvious increasing debts. Nevertheless, different regions recorded different levels of increase in debt. 

Provinces Ranked by Consumer Debt Levels 

Generally speaking, Canadians carry over $20,000 in non-mortgage debt on average, according to Equifax. However, different provinces record notable variances in debt levels and delinquencies. 

  1. Alberta

Records from Equifax show that Calgarians have many debts on average ( as high as $29,076 ). Yet, residents of Fort McMurray tend to carry even more dues reaching over $30,000.

As of 2017, the province’s delinquency rate kept going up by about 14 percent compared to the first three months of 2016. More recent statistics show that the delinquency rate for this region was at 1.53 percent.

  1. Saskatchewan 

The situation in Saskatchewan is a bit similar to what we have in Alberta. The consumer debt excluding mortgages averaged $24,789, while the delinquency rate stood at 1.58 percent. 

  1. British Columbia 

In British Columbia, residents carried an average of $24,851 in debts. In this province, however, delinquencies were down at 0.98 percent. This province recorded the lowest delinquency rates of all the regions. 

  1. Newfoundland

The recorded delinquency rate for this province was 1.84 percent, one of the highest rates recorded. Its average consumer debt was $24,075. Residents of Newfoundland find it very difficult to pay off their debts. 

  1. New Brunswick 

At a delinquency rate of 1.85 percent, New Brunswick recorded one of Canada’s highest rates. However, its consumer debt averaged $23,872 only. 

  1. Nova Scotia 

Residents of Nova Scotia carry $22,643 in debts on average. Their delinquency rate was also one of the highest rates in Canada, at 1.80 percent.

  1. Prince Edward Island 

The average consumer debt is $23,232, and the delinquency rate is 1.23 percent in Prince Edward Island. 

  1. Ontario 

In early 2017, home prices skyrocketed in Toronto and many other Southern provinces of Ontario. However, this province’s delinquency rate dropped by over 6 percent, and the average consumer debt was at $22,022. In 2019, the average debt rose to $24,406, and the delinquency rate was 1.07 percent. 

  1. Quebec 

Quebec residents, on average, have one of the lowest consumer debts and delinquency rates in Canada. The average consumer debt is $19,833, and the delinquency rate is 1.06 percent. 

  1. Manitoba

Manitobans have the lowest consumer debts on average at $18,914. Yet, their delinquency rate is not as little as that of Quebec. The delinquency rate for this province is 1.48 percent. 

The Average Canadian Credit Score 

The Canadian credit score ranges from 300 to 900. A high credit score has many financial advantages: the higher your credit score, the higher your chances of getting access to loans and various credit products. 

The average Canadian credit score has been placed around 650 by TransUnion, a Canadian credit reporting bureau. Most Canadians have average to good credit scores. This statistic means that many Canadians should not have problems getting approved for loans and other credit products. 

Some of the most critical factors that affect your credit score are:

  • How much debt you carry every month 
  • Your repayment history and timeliness 
  • Your length of time as a credit user
  • Your diversity of credit accounts 

Moreover, different provinces have different credit scores on average. Certain regions offer better financial opportunities, thereby creating differences in the average credit score by region

Cities like Toronto, Ontario, British Columbia, and Victoria have the highest number of people with a credit score above 670. In contrast, Whitehorse, Yukon has an average of 619. 

The debt levels of these provinces affect their average credit scores. Debt is one of the points taken into consideration when calculating the credit score. 

For Alberta residents ( since this province records the highest debts on average ), getting professional financial help is the most brilliant move to make. Check out Alpine Credits for an expert’s opinion. 

Conclusion 

Your financial literacy, financial perception, and attitude will determine the amount of debt you will carry over time. 

Developing an excellent financial habit will profit you in many ways, like improving your credit score, thereby increasing your chances of achieving financial stability. 

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