TORONTO – Consumer debt rose to a record $2.5 trillion in the third quarter as many Canadians continue to struggle with high living costs and rising unemployment, new surveys from two credit bureaus say.
Equifax’s report says newcomers and consumers who borrowed money for the first time in the past 12 to 36 months saw the biggest rise in missed payments, compared with the same consumer group last year.
However, it says the pace of missed payments has slowed following recent interest rate cuts.
Another credit bureau, TransUnion, says total consumer credit debt rose 4.1 per cent in the third quarter year-over-year as more gen-Z consumers entered the credit market — making them the fastest-growing segment to carry an outstanding balance.
Equifax adds auto loans were one of the biggest drivers of rising consumer debt, with non-bank auto loans up 12 per cent and bank auto loans up 2.7 per cent year-over-year in the third quarter.
Rebecca Oakes of Equifax Canada says small affordability improvements in the auto market such as moderating car prices and easing financing rates are leading to increased demand for vehicle purchases.
TransUnion forecasts auto loan sizes in 2025 to remain flat as lower interest rates will offset high average vehicle costs, while overall auto delinquencies are expected to improve slightly next year.
This report by The Canadian Press was first published Nov. 26, 2024.
