Personal Debt Hits All-Time High

The average Canadian carries $27,485 in debt, according to TransUnion Canada's latest report

Written by Melissa Campeau

Personal debt is at an all-time high in Canada. TransUnion’s quarterly analysis of credit trends found the average Canadian consumer’s total debt, not including mortgages, increased by nearly 6% from $25,960 at the end of 2011 to $27,485 in the fourth quarter of 2012. That 6% year-over-year increase was the largest of its kind since 2009.

On a quarterly basis, national debt levels rose by 2.7% between the third and fourth quarters, the biggest increase of this kind since 2008. “Increases in personal debt are not surprising during the final quarter of the year, as consumers tend to spend more during the holiday season,” says Thomas Higgins, TransUnion’s vice president of analytics and decision services. However, he notes, the rise on the year-over-year basis is more concerning since it means the typical Canadian’s debt load has increased by more than $1,500.

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For the most part, debt growth was consistent throughout Canada last year, with all provinces experiencing increases. The only exception was B.C., which showed a small decline of 0.1%, year over year. At the other end of the spectrum, the most significant increases were found in Alberta (11.2%), Quebec (9.4%) and P.E.I. (9%). “Balance changes were as expected, though British Columbia’s drop was the most eye-opening observation from the data,” Higgins says. “It should be noted, though, that British Columbia has among the highest debt levels in the nation.”

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Consumer debt increases were seen in four measured categories. Canadians’ average credit card debt inched up by 0.1% year over year for the first time in more than two years, while amounts owing on lines of credit increased 2.6% year over year. Debt on installment loans took a turn for the worse, with an increase of 6.7% year over year—this category’s largest growth in more than two years. The biggest upswing was noted in the category of car loan debt, with Canadians owing 8.9% more in 2012 than in 2011.

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