Albertans hold most average consumer debt in Canada: report

Owe is Alberta.

According to a consumer trends report released Thursday by Equifax, residents of the province held the highest average amount of non-mortgage debt in the second quarter of 2023 at $24,439.

The average for all of Canada: more than 10 per cent less at $21,131.

Among major Canadian cities, people in Calgary and Edmonton held average non-mortgage debts of $24,143 and $23,732, respectively, ahead of the likes of Toronto ($20,067), Vancouver ($22,282), Montreal ($16,442) and Ottawa ($19,142). Equifax's report found the average non-mortgage debt held by residents of Fort McMurray to be $37,549.

Albertans holding higher levels of debt than the rest of the country is nothing new, however, says Rebecca Oakes, vice-president of analytics for Equifax Canada – which recently produced its Market Pulse - Consumer Quarterly Credit Trends Report, the source of the data – calling Alberta "a little micro economy all to itself sometimes" given the volatile nature of the oil industry.

"In terms of debt levels, though, the simple answer, and it's probably not a very exciting one, is when we look at what consumers are using in terms of credit, they tend to have more installment loans ... they tend to be a bit higher," Oakes said of Albertans' debt levels in an interview with CTV News Edmonton. "Whether that's to purchase a vehicle, it's just slightly higher levels than we see in the rest of Canada. You also have slightly higher credit card balances as well. They're the two things that are contributing to that little bit higher extra debt level."

Oakes said Equifax is observing an increase in consumers' average minimum monthly payments and wonders, if interest rates stay around the current rate, how that will affect debt and deliquency rates in the future.

"Can they keep making those payments or are they going to find themselves struggling to make those payments?" Oakes said. "Mortgages, in particular, we're watching because if you've got a fixed-rate term on your mortgage, when that comes up for renewal, there might be a payment shock potentially coming if interest rates haven't come down."

The post-COVID pandemic climate of rising interest rates and inflation seems to have taken people by surprise, says Michelle Liang, marketing and communications manager for Money Mentors.

"We've certainly been busier," Liang said of the non-profit organization that provides financial education to both schools and the public to help people better manage their money.

"We, for years, have seen that a good portion of Albertans are typically living with just enough household income to cover their living expenses, and many also don't have retirement savings. A lot of this is due to the fact that they carry large amounts of debt because they could afford it. Cost of living was a lot lower before (with) the mentality of living on corporate accounts, leasing, borrowing and living a good lifestyle.

"It wasn't an issue, I think, until we really hit COVID. They were affected like everyone else, but I think it's catching up to people."

Liang said another factor they're seeing among their clients is the effect of job losses and lower levels of income "than they were accustomed to" in the wake of the pandemic's end but still carrying the same debt load as before.

"Couple that with the situation we're in right now, with the rise in interest rates, and how it's affecting affordability across all aspects of people's cost of living, I think that's where it's really catching up to people here in Alberta," she said.

Advice for those worried about mounting debt: make a budget, and if you need help, seek a credit counsellor.

"Doing a budget is not something that you automatically know how to do," Liang said. "We often will tell our clients simply bring in your bank statements, your credit card, your line of credit statements. It's a good starting point because we need to start categorizing and looking at where that spending is ...

"It comes back to the very basic needs and wants, and that is different for every individual, but when you are faced with the crisis that we're in right now, having a counsellor who can sit down and go through this with you calmly and help you find that path, that's what we're really here to do."

With files from CTV News Edmonton's Jeremy Thompson