Alberta and Saskatchewan residents are falling further behind on their debt payments, as delinquency rates in both provinces saw double-digit growth in the second quarter, according to a TransUnion report released on Wednesday.
Ninety-day delinquency rates rose 14.7 per cent in Alberta and 11.6 per cent in Saskatchewan, the consumer credit information company said. Ontario and B.C. residents levered up at the fastest rates with non-mortgage debt balances rising 3.1 per cent and two per cent, respectively.
Overall, Canadians heaped on more debt in the second quarter, with average non-mortgage indebtedness rising almost three per cent to $21,580.
“This is not even the first quarter we have seen this [in Alberta and Saskatchewan]. We have seen this for three, four quarters now, and of course, it’s a direct impact of the oil slump,” said TransUnion director Jason Wang in an interview with BNN.
With no immediate relief in sight for slumping oil prices, Wang warned that the surge in delinquency rates in Alberta and Saskatchewan likely won’t slow down any time soon.
The problem may even worsen now that employment insurance and severance packages are running out, a year-and-a-half into the oil slump, he said.
“Canadian consumers have the willingness to pay… but willingness is a different thing than your ability to pay,” Wang said. “Unfortunately that’s what’s happening in Alberta when there’s layoffs and workers don’t have income.
“So when will this stop? I would say we’re going to have to wait and see how oil turns out.”