TORONTO — Credit rating agency Equifax Canada says consumer average non-mortgage debt dropped for the first time in more than a decade in the first quarter as a result of the COVID-19 pandemic.
This debt decreased nearly 0.5 per cent, reflecting a significant drop in consumer spending in March.
Equifax says the average non-mortgage debt in Canada fell to $23,386.
Provincially, Saskatchewan fell the most with a 2.44 per cent decrease, followed by Manitoba, Alberta and British Columbia. Nova Scotia was down 1.29 per cent in the east, but Quebec rose 0.4 per cent and Ontario was 0.05 per cent higher.
Young Canadians aged 18 to 25 had the lowest average debt at $8,588, down a little more than one per cent. That trend continued progressively with those aged 26 to 35 and 36 to 45.
The most indebted were people 46 to 55 years old at $35,818, which was up 0.82 per cent, followed by those 55 to 65 with $30,013 of debt that grew 0.47 per cent.
The Canadian delinquency rate — the percentage of credit users that have missed at least three payments — was 1.22 per cent, up almost nine per cent from the first quarter of 2019. B.C.’s rate rose 12.65 per cent, followed by Ontario and Alberta.
Credit demand dropped suddenly as the economy shut down in late March, says Bill Johnston, Equifax Canada’s vice-president of data and analytics.
“With stores and restaurants shut down, consumers were able to cut back on their spending in March as retail sales numbers indicated,” Johnston said. “That trend gained momentum in April, with few signs that consumers are looking to debt for support in the early days of the pandemic.”
This report by The Canadian Press was first published June 16, 2020.
The Canadian Press