Skip to main content

After years of whipping out their credit cards and tapping into lines of credit, there is further evidence that Canadians are thinking twice before taking on more consumer debt.

A quarterly analysis from credit bureau TransUnion showed that the average Canadian's non-mortgage debt was $25,594 in the third quarter of 2011. That is down $9 from $25,603 in the previous quarter but $431 higher than $25,163 a year ago.

While the quarterly drop might not sound impressive, it marks the third-consecutive quarter that debt loads have either declined or remained about the same following 26-straight quarterly increases.

Story continues below advertisement

TransUnion's report pointed to a deceleration in total debt increases, which basically means Canadians are taking on more debt at a slower pace.

Thomas Higgins, TransUnion's vice-president of analytics and decision services, said the latest data suggests "Canadian debt loads are stabilizing."

He attributed the slowdown to global economic uncertainty. "In the third quarter alone, Canadian consumers witnessed major stock market declines, the European debt crisis and continued high unemployment," Mr. Higgins said.

The latest TransUnion report comes on the heels of new analysis from Canada Mortgage and Housing Corp. that shows the rate at which Canadians are racking up new mortgage debt has also slowed.

Policy makers like Bank of Canada Governor Mark Carney have been warning Canadians about excessive debt loads and their ability to repay the money they owe once interest rates rise from their current lows.

The average Canadian household has debt that is 150 per cent of income, and mortgage debt accounts for the largest chunk of credit that Canadian consumers hold.

Outside of mortgages, Canadian household debt levels have surged as consumers rely more on their credit cards and lines of credit. Lines of credit, which have lower rates than credit cards, now account for more than 40 per cent of all Canadian non-mortgage debt, TransUnion said.

Story continues below advertisement

TransUnion's data showed that average Canadian credit card debt fell 2.65 per cent from a year ago but rose 0.59 per cent on a quarterly basis as the holiday season approaches. But Canadian lines of credit debt rose 4.5 per cent from a year ago and 0.79 per cent on a quarterly basis.

While debt delinquencies have remained relatively stable, both increased unemployment rates and the upcoming holiday shopping season may weigh in over the upcoming months, TransUnion noted.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies