Why Saskatchewan needs a resources rebound
- 11 Aug 2016
- The StarPhoenix
- GARRY MARR
- Financial Post
Defaulting on debts on the rise in Sask.
TORONTO Declining oil prices helped drive double-digit annual increases in delinquency rates in Alberta and Saskatchewan, according to a credit agency report published Wednesday.
TransUnion said the percentage of people delinquent on debt for more than 90 days rose to 3.08 per cent in Alberta — a 14.7 per cent jump from a year ago. In Saskatchewan the rate rose to 3.38 per cent, an increase of 11.59 per cent during the same period.
“This was not unexpected as we had already forecast this to happen last summer,” said Jason Wang, director of research and analysis in Canada for TransUnion, in a release, noting the credit agency had previously predicted both provinces would see upward pressure on delinquencies this year and next because of falling oil prices.
The agency also said consumers in Ontario and British Columbia ramped up their credit levels in the first half of 2016, but their delinquency levels remained stable even as balances rose. Toronto residents increased their non-mortgage credit balances by 3.6 per cent in the second quarter, compared to a year ago, while Vancouver residents saw a 4.6 per cent increase in credit balances during the same period.
“As two of the nation’s largest provinces, Ontario and British Columbia have proven to be resilient during challenging economic conditions brought on by the oil slump and the recent wildfire in Alberta,” said Wang, noting that half of the country’s active credit population lives in those two provinces. “Their stable performance is a positive for the overall economy.”
Nationally, TransUnion said the average non-mortgage consumer debt was $21,850, a 2.89 per cent increase from a year ago. The delinquency rate rose to 2.72 per cent nationally, a 3.59 increase from a year ago.
“A year and a half into the oil slump, the lending industry has deployed resources in monitoring and managing the risks in the oilpatch,” Wang said. “With these risks being actively managed, it may benefit lenders to also consider growth opportunities in the non-oil provinces, such as Ontario and British Columbia. The key of course is for lenders to always seek balance in their lending strategies.”