Credit demand remained high in the first quarter of this year while the mortgage market experienced a notable slowdown, according to Equifax® Canada’s most recent Market Pulse consumer credit trends and insights report. Despite the slow mortgage market, the total consumer debt remained substantial at $2.37 trillion, representing a 4.9 per cent increase from the same period in the previous year, said the report.
Rebecca Oakes
“We normally expect to see a drop in non-mortgage debt during the first quarter of the year as consumer spending slows following the holiday season. However, despite this seasonal trend, we’ve observed a continued increase in credit card balances during Q1 2023, which is keeping consumer debt high,” said Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada. “The higher cost of living and the influx of new consumers entering the credit market have driven credit card balances to rise by 14.5 per cent compared to Q1 2022.”
The report said that on average, consumers are spending 21.5 per cent more each month on their credit cards when compared to their pre-pandemic spend. Average monthly spend per credit card holder has exceeded $2.2K this quarter, up ~$400 compared to Q1 2020. The biggest increase in credit card spending is from revolving consumers (consumers who pay less than 90 per cent of their credit card balance each month). Higher spending has pushed the minimum payment requirement for credit card consumers up by 16.5 per cent year-over-year.
“In Q1, 175,000 more consumers missed payments on at least one non-mortgage product, representing an 18.8 per cent increase from the first quarter of 2022. The impact of current economic headwinds is particularly evident in British Columbia and Ontario, which have experienced some of the largest rises in 90+ days non-mortgage balance delinquency rates, up 31.1 per cent and 31.2 per cent respectively since Q1 2022,” said Equifax.
“At the end of 2022, delinquencies were more pronounced among consumers without mortgages. The latest data reveals an increasing number of mortgage holders missing payments on non-mortgage products, reflecting a 15.7 per cent increase from Q1 2022. This year-over-year increase is almost double the rate observed in the previous quarter (8.9 per cent from Q4 ‘21 to Q4 ’22). Consumers holding variable rate products are feeling the pressure of higher payments, however, overall mortgage delinquency rates remain lower than pre-pandemic levels.”
“Increased missed payments on products like credit cards and auto loans are a concern but pockets of the population have been impacted more than others during this uncertain period,” said Oakes. “At the end of last year, younger and lower income individuals were showing increased difficulty in making payments. We are now starting to see more homeowners struggle as well, especially following mortgage renewals where payments have risen significantly.”
Age Group Analysis – Debt & Delinquency Rates (excluding mortgages)
| Average Debt (Q1 2023) | Average Debt Change Year-over-Year (Q1 2023 vs. Q1 2022) | Delinquency Rate ($) (Q1 2023) | Delinquency Rate ($) Change Year-over-Year (Q1 2023 vs. Q1 2022) | ||
| 18-25 | $7,896 | -2.87% | 1.69% | 23.47% | |
| 26-35 | $16,986 | 0.91% | 1.62% | 27.81% | |
| 36-45 | $25,829 | 2.97% | 1.23% | 26.66% | |
| 46-55 | $32,314 | 2.77% | 0.90% | 25.66% | |
| 56-65 | $26,470 | 1.16% | 0.82% | 24.67% | |
| 65+ | $14,129 | -1.79% | 0.92% | 15.95% | |
| Canada | $20,906 | 0.78% | 1.10% | 25.34% | |
Major City Analysis – Debt & Delinquency Rates (excluding mortgages)
| City | Average Debt (Q1 2023) | Average Debt Change Year-over-Year (Q1 2023 vs. Q1 2022) | Delinquency Rate ($) (Q1 2023) | Delinquency Rate ($) Change Year-over-Year (Q1 2023 vs. Q1 2022) | ||
| Calgary | $24,011 | -3.91% | 1.27% | 11.92% | ||
| Edmonton | $23,711 | -2.26% | 1.63% | 20.28% | ||
| Halifax | $20,698 | -0.60% | 1.21% | 26.34% | ||
| Montreal | $16,279 | 1.75% | 0.95% | 24.75% | ||
| Ottawa | $18,877 | 2.29% | 1.00% | 27.27% | ||
| Toronto | $19,878 | -0.13% | 1.40% | 31.39% | ||
| Vancouver | $22,131 | -1.41% | 0.87% | 36.29% | ||
| St. John’s | $23,214 | -1.44% | 1.32% | 20.59% | ||
| Fort McMurray | $37,144 | -0.47% | 1.91% | 23.26% | ||
Province Analysis -Debt & Delinquency Rates (excluding mortgages)
| Province | Average Debt (Q1 2023) | Average Debt Change Year-over-Year (Q1 2023 vs. Q1 2022) | Delinquency Rate ($) (Q1 2023) | Delinquency Rate ($) Change Year-over-Year (Q1 2023 vs. Q1 2022) | ||
| Ontario | $21,333 | 2.18% | 1.09% | 31.07% | ||
| Quebec | $18,292 | 1.69% | 0.75% | 24.86% | ||
| Nova Scotia | $20,454 | -0.55% | 1.41% | 23.77% | ||
| New Brunswick | $21,624 | -0.48% | 1.41% | 13.01% | ||
| PEI | $22,165 | 1.14% | 0.98% | 26.17% | ||
| Newfoundland | $22,731 | -0.27% | 1.39% | 19.55% | ||
| Eastern Region | $21,411 | -0.37% | 1.38% | 19.17% | ||
| Alberta | $24,324 | -2.90% | 1.46% | 14.86% | ||
| Manitoba | $16,805 | 0.81% | 1.45% | 28.72% | ||
| Saskatchewan | $22,113 | -0.70% | 1.44% | 18.59% | ||
| British Columbia | $21,554 | -0.28% | 1.00% | 31.23% | ||
| Western Region | $22,112 | -1.25% | 1.25% | 21.50% | ||
| Canada | $20,906 | 0.78% | 1.10% | 25.34% | ||
* Based on Equifax data for Q1 2023
Mario Toneguzzi
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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