Delinquency rates in Alberta and Saskatchewan climbed higher in the second quarter due to the fallout from the drop in the price of oil. Delinquency rates, while still low, have increased drastically from a year ago in the oil-producing regions of Alberta, Saskatchewan and Newfoundland and Labrador, as indicated by another report from Equifax Canada. The report adds to the developing assemblage of proof that a large number of cutbacks in the oilpatch are making it harder for a few buyers to pay their debts.
Equifax Canada said the delinquency rate for Alberta stood at 1.4 percent, up 40.3 percent compared with a year ago. The delinquency rate in Saskatchewan climbed to 1.2 percent, a gain of 22.7 percent.
Nationally, the delinquency rate edged up by 4.1% from a year prior. In any case, the information demonstrates that most by far, of consumers, even in the hard-hit oil economies, are as yet figuring out how to pay their bills before hitting the “delinquent” stage. The delinquency rate in Alberta, for example, rose to 1.4%, still marginally lower than the rate in the three Maritime provinces.
The Equifax report additionally highlights delinquency rates by age group. It demonstrates that while seniors added to their debt load more than other groups, their misconduct rate fell by 2.4%, the only age group to see a drop. Millennials, then again, the 18 to 25 group, saw their delinquency rate bounce 11.7% up, despite the fact that their debt load was the littlest of all ages group. Excluding mortgages, customers owed a normal of $21,878 in the second quarter of 2016, up 3.4% from the same quarter a year ago.
The oil-producing provinces have been hit hard by the downturn in the price of oil as energy companies have slashed billions in spending and cut thousands of jobs.
“[Delinquency rates] are still relatively low, and that has to be kept in perspective, but we are definitely seeing the impact of the prolonged situation in those regions,” said Regina Malina, a senior director at Equifax Canada.
“It looks like it is a fairly persistent situation so we’ll probably see these increases for a while until the region will adjust to the new economic situation.”
“For the most part, older Canadians have always demonstrated an ability to handle their spending and what they owe,” Malina said.