Debt levels for Canadians rose slightly in the first quarter ended March 31 but the rate of 90-day delinquencies dropped by 13.4% from a year ago to a record low 1.2%, according to a report from Equifax Canada.
“Late-stage delinquency rates continue to show improvement, especially in the energy-rich economies of Edmonton and Calgary as well as in Vancouver and Ottawa,” Cristian deRitis, senior director of consumer credit economics at Moody’s Analytics, said Wednesday.
The 1.2% rate of unpaid debt in 90-day-plus delinquencies, which excludes mortgage debt, is much lower than the 1.39% posted in the first quarter of 2012, the agency said.
“This represents very positive financial control by consumers and lending institutions given the sustained low interest rate environment and improved employment rates,” said Nadim Abdo, vice president of client solutions at Equifax Canada.
Outstanding household debt and available credit rose in the first quarter by 3.9% and 4.4%, respectively, on a year-ago basis, a break in the trend in decelerating growth that started in 2011, according to the report.
Total non-mortgage debt in the first quarter was $500.8 billion, up from $497 billion in the year-earlier period.
But Equifax warns that increasing bankruptcy filings reflect “the growing financial strains on Canadian families, particularly in Montreal and Halifax.”
First quarter consumer credit conditions were “mixed with outstanding balances rising and late-stage delinquency rates falling relative to a year ago,” added deRitis.