Latest Delinquency Statistics Vary by Region

Equifax Canada has released data which shows the number of Canadians falling behind on their bill payments has risen substantially over the past year.

The data shows that the national delinquency rate rose by just over 7% in the period from February 2008 to February 2009. The delinquency rate measures the proportion of consumer bills that are 90 days or more past due. "Most of the increase is coming from credit card debt," vice-president of Equifax Consulting Solutions, Nadim Abdo, says.

Rate varies by region; Quebec leads the pack

The delinquency rate varies substantially across the country. Among major Canadian centres, Montreal had the greatest increase at 15.9%, followed closely by Calgary (13.2%).

This data about the variation in the delinquency rate by region comes as the latest Bensimon Byrne Consumerology Report shows Quebec consumers are the least optimistic about economic recovery in Canada, and the most worried about job loss in their households.

Other major centres which saw an above-average increase in the 7.3% national delinquency rate include Quebec City (12.8%), Hamilton (10.9%), Edmonton (9.7%) and London (9.3%).

However, some centres saw below-average increases in the delinquency rate, including Toronto (1.4% increase), Ottawa (4.2%), Halifax (4.8%) and Vancouver (5.5%).

Long-term impacts of current recession may divide Canadians

The long-term economic impacts of the current recession may be polarizing for Canadians, with the variation in delinquency rates just one expression of how people’s experiences and behaviours vary across the country.

While all Canadians report they have been touched in some way by the current recession, some relate to it as a “bump in the road” with expectations that things will be “back to normal” in a year or so.

However, support for this point of view is weakest in Quebec, where only 50% of residents feel the economic situation will have improved in a year – a full 20% percentage points lower than in the rest of Canada.

Retailers, consumers, and lenders will need to pay attention to the regional variations in consumer confidence and the delinquency rate as they plan how to work with Canadians through the recession and beyond. A higher delinquency rate coupled with reduced optimism for economic recovery may mean that missed and late payments are at risk of becoming the “new normal” for some segments of the Canadian population.