The average Canadian’s debt reached $73,532

The recent report by a credit rating agency Equifax Canada shows that an overall consumer debt was up by 2.8% and reached $1.99 trillion during the second quarter of this year.

Growing mortgage balances raised an average debt per person by 2.2% annually to $73,532, even in spite of the economic influence of the COVID-19 pandemic.

“Mortgage activity has coped with the challenges from COVID and showed the earliest signs of a rebound,” – says Rebecca Oakes, assistant vice-president of advanced analytics.

At the same time, non-mortgage debt was down by 3% to $23,035 as credit cards, auto loans and lines of credit were affected by massive shutdowns.

The largest per capita non-mortgage debt was reported in Alberta ($28,261), while Manitoba showed the lowest number ($18,243). However, Alberta saw the biggest decline of it. The smallest drop was seen in New Brunswick.

“Other credit products started showing signs of recovery with credit card spending already growing in June. In case of those who haven’t used a payment deferral, the card spending returned to pre-pandemic levels by the end of the quarter,” – Oakes noted.

Approximately three million consumers used COVID-related payment deferrals since February. It turns out the program was mostly popular among 35-44-year-old age group (15.1%), while seniors were less likely to use it (5.7%).

The delinquency rate, which is the share of balances with at least three missed payments, rose by 10.6% on a year-over-year basis and reached 1.24%.

“Delinquency rates were relatively well. They don’t reflect the significant growth in job losses due to the different support mechanisms,” – Oakes explained.

“One in five people using deferred payments were already facing financial issues before the pandemic began. It will be more difficult for some of them to recover, as the support mechanisms began to reduce.”