Canadians continue to fall behind on their credit payments at an ever-increasing rate according to data released Friday by Equifax Canada.

The average delinquency rate for Canada rose by approximately 19% over a one-year span from May 31, 2008 to May 31, 2009. In April, the same rate was increasing at 13%. The average delinquency rate for all of Canada as of May 31, 2009 was 1.52%. This means that over a half a million Canadians are now more than 90 days behind on their credit payments.

Provincially, Nova Scotia had the highest average delinquency rate in May at 2.07% and Saskatchewan had the lowest rate at 1.22%. Ontario’s rate was
1.74%.

Equifax Canada defines delinquent accounts as credit facilities that have not received a payment for at least 90 days. The average delinquency rate is calculated by comparing the number of delinquent credit facilities to the total number of credit facilities.

On a yearly basis, the average delinquency rates have been rising dramatically in Alberta (26%) and British Columbia (27%), and, on the east coast, Prince Edward Island experienced a 26% increase. The national yearly average rate of increase is 18.8%.


Equifax Canada notes that these provinces continue to have average delinquency rates that are lower than the national average with B.C. at 1.31% and Alberta at 1.42%. In PEI (2.05%), however, average delinquency rates were higher than the national rate.

“While we have seen delinquencies increase steadily since the beginning of the year, the rate of increase in the past three months has been significantly higher,” says Nadim Abdo, vice president of Equifax Canada Consulting Solutions.

“The sharpest increase has resulted from Credit Card and Sales Finance purchases, which have increased by 38% and 58%, respectively, since May 2008. Such transactions typically represent the purchase of durable goods, such as furniture or electronics, and consumers appear to be willing to fall behind on them first before they miss payments on their Bank Loans and Lines of Credit.”

IE