Albertans have highest level of consumer debt in the country: report

A new report finds three Alberta cities are leading the country with the highest level of non-mortgage debt in Q4 of 2023.

The latest findings from Equifax show Calgarians had an average consumer debt load of $23,885 between last September and December, while Edmonton residents had $23, 719.

Fort McMurray residents, however, were in a considerable amount more, with an average of $37,762.

Equifax vice president Rebecca Oaks says their high rates came as no surprise.

“For Alberta, we just tend to see a bit of a difference in terms of some of the products consumers use and some of those balances tend to be higher across the board — credit card balances tend to be higher,” she said.

Calgary-based Concordia Economics professor Moshe Lander agrees, saying that fluctuating interest rates also have a lot to do with it.

“A lot of that non-mortgage debt is variable rates — auto loans, lines of credit, credit cards — they’re almost all variable rates,” he said. “So, when you have interest rates going from record lows to generational highs, that’s going to put a huge burden on people’s ability to make their payments.

“Wages and incomes have not been keeping pace and so that debt-burden in relation to income has been growing as well.”

The report also found that Alberta’s delinquency rate was the highest in the entire country, at 1.63 per cent, which Oaks says is not out of the norm.

“The industry in Alberta tends to be a little more volatile, more linked to what’s happening with oil and gas prices,” she said. “Sometimes what we do get is just geographical variations, some of the industry in Alberta is very different than the rest of Canada and maybe that’s just an indication of how they have to use credits in those regions is a little bit different.”

Lander predicts that debt rates in relation to income will keep hiking in the months to come

“It’s for two reasons, one: there’s still a large swath of Canadians that have not reset their mortgages yet and so when they reset, they’re going to find it’s a lot harder than it was, say, in 2020 when they set in that five-year rate,” he explained. “The other aspect, of course, is that our incomes are stagnating.”

Last year, post-renewal monthly payments across the country increased by an average of $457.

On a provincial scale, even though Alberta carries the most average debt in the country, the report finds it still dropped 1.5 per cent year-over-year.