Good news for clients means good news for planners

Canadian’s debt on the decrease could be an indication of better money management

According to Equifax Canada's Q3 2015 National Consumer Credit Trends Report, on average, Canadians' ability to pay back loans has never been better.  The report reveals the 90+ delinquency rate is at its lowest level ever at just 1.05%. This however excludes mortgages.

It also represents a significant drop from last year’s results for the same quarter, which showed the percentage to be 4.3%.

The report also reveals Ontario as a key driver in bringing the delinquency rates lower but there were also strong improvement seen in Quebec and other eastern provinces.

Regina Malina, senior director of decision insights at Equifax Canada, said: "Delinquency rates are an indicator that we follow closely and we are now seeing a negative effect in western Canada. The same holds true in Newfoundland - essentially anywhere in the country where the economy is impacted by oil."
 
The reasons behind the significant drop have not been stated but it seems Canadians are potentially managing their finances a little better. This could be with the help of advisors.

Bankruptcies in Alberta, Saskatchewan and Newfoundland & Labrador still increased in the third quarter but were still down by 9.3% when compared to the same quarter last year.

The total reported consumer debt now stands at $1.587 trillion compared to $1.568 trillion in Q2 2015.

Despite the holiday season and the spending that comes with it, Malina believes Canadians will keep themselves in check.

"Consumer debt levels continue to rise and those numbers are sure to increase following the holidays," added Malina. "However, despite other market research we've seen predicting a boom in spending over the holidays, we expect most Canadians will continue to manage their spending wisely. Demand for new credit has eased off."
 
 

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