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TransUnion’s first-quarter report illustrates that Canadians have a strong handle on their debt, as long as their local economy is stable and rates remain low.BernardaSv/Getty Images/iStockphoto

A new report from credit-monitoring agency TransUnion has found that Canadians are taking on consumer debt in a healthy way – except in Alberta and other oil-dependent regions.

Nationally, the first quarter of 2017 saw a 1.9-per-cent rise in consumer non-mortgage debt levels over the same quarter in 2016, to an average of $21,696. Non-mortgage delinquencies more than 90 days, meanwhile, fell slightly to a rate of 2.7 per cent.

But in Alberta's major metro areas, the long tail of the oil slump is still hitting consumers. Edmonton's non-mortgage debt hit an average of $24,354, with delinquencies rising to a rate of 3.7 per cent. And Calgary fared worse, hitting average consumer debt of $28,184 and delinquencies soaring to a rate of 2.9 per cent.

As access to credit continues to improve for Canadians, TransUnion's first-quarter report – released early Thursday – illustrates that Canadians have a strong handle on their debt, as long as their local economy is stable and rates remain low. But neither of those things are guaranteed forever.

"Rising consumer credit leaves households more exposed to rate increases," says Laura Cooper, a Royal Bank of Canada economist who released a separate report on household debt Wednesday.

The threat of higher debt payments wouldn't necessarily hit Canadians evenly, however. "It's the concentration of debt among a relatively low share of households that is the key risk to watch, as opposed to aggregating all households to have these household debt concerns."

Ms. Cooper's report indicates, in fact, that Canadians' household assets exceed outstanding debts by about a six-to-one ratio, and that a third of Canadians are debt-free, with one-quarter owing less than $25,000.

RBC also came across more concerning Canadian debt trends. Consumer credit interest payments across the country, for instance, are equal to mortgage interest payments – despite a higher effective interest rate on non-mortgage debt.

Ms. Cooper noted, too, that the share of household income being used to pay down debt has been stable the last few years – despite declining interest rates. An one-percentage-point rise in rates over the next year, she warned, could make debt payments a struggle for some households, nudging them up by two cents from every dollar of income.

TransUnion's most jarring findings were its debt and delinquency rates in Alberta and other oil-focused regions. "There are certainly consumers that might be closer to being in economic stress," says Matt Fabian, director of research and consulting for TransUnion Canada. But in general, he said, "we're seeing that customers are managing. Debt levels are low year-over-year – nationally, consumers are able to handle it."

He said delinquencies tend to have a lag effect, and that despite rising in Alberta – and to a lesser extent in Saskatchewan and Newfoundland and Labrador – they've "partly rebounded" from their bottom a year ago. "We have seen a slight slowing in the increase in delinquency. It's still increased, but not at the rate it had in previous times," Mr. Fabian says.

TransUnion is one of Canada's leading providers of consumer credit reports, alongside Equifax Canada. Its first-quarter report found that Montreal had the lowest average non-mortgage debt of major Canadian metro areas, at $15,876. And it was Toronto that saw the sharpest decline in delinquency rates – falling to a rate of 3.1 per cent.

Credit access grew across the country. Non-mortgage balances grew 1.6 per cent in the first quarter, while credit limits rose 2.3 per cent.

Both reports highlighted Canadians' growing appetites for auto loans, with TransUnion taking note of their rapid growth last quarter: average balances rose 2.8 per cent to $18,783. But Ms. Cooper at RBC cautioned about a potential rise in delinquencies, noting that non-prime auto loans are being taken on at a higher rate than prime loans.

Canadians have an good credit score from paying back your debt, but that debt could cost you savings down the road

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