Undeterred by a weakening economy and warnings to curb their borrowing, Canadians pulled out their credit cards and piled on more debt at the end of last year.
Consumer debt in Canada – a figure that includes mortgages – hit $1.529-trillion at the end of 2014, a 1.1 per cent increase from $1.513-trillion in the previous quarter and up 7.7 per cent from $1.42-trillion a year earlier, according to a report released Tuesday by credit monitoring firm Equifax Canada.
"When compared to the same quarter last year national consumer demand for credit was driven mainly by credit cards," the report said, noting that bank and auto loans also increased from year-earlier levels.
Excluding mortgages, the average consumer debt held by Canadians rose 2.9 per cent to $20,967.
"It's a cautionary tale what we are currently seeing in the Canadian economy," said Regina Malina, a senior director at Equifax Canada.
She noted that the rapid drop of oil prices may have caught many by surprise. "And that's the point – consumers and business owners need to be more vigilant. When economic change happens, it can happen very quickly and can challenge previously observed stability of key economic and credit indicators."
Despite concerns about consumer debt, the 90-day-plus delinquency rate has remained the same or declined in most regions, coming in at 1.09 per cent nationally in the fourth quarter, the lowest since 2008.
In December, Canada's central bank issued another warning about rising levels of household debt, which is sitting near a record high of 163 per cent of disposable income.
When it lowered interest rates in January, the Bank of Canada cited falling oil prices and the risk of job losses and slower economic growth. That would leave already heavily-indebted households in an even more precarious situation.
Tuesday's Equifax report comes just one day before the Bank of Canada's next interest rate announcement.