Update on personal bankruptcies

Originally posted 18 August 2016

Equifax Canada, one of Canada’s largest consumer debt rating monitoring firms,  released today (18 August) information about average debt and delinquency rates by age categories, major city, and provincial breakdowns. In Calgary, the average debt level (excluding mortgages) was the highest in Canada at $28,572 up by only 1.2 per cent year-over-year.  This was, significantly, the smallest increase in Canadian cities.  Calgary’s delinquency rate at 1.1 per cent was the same as the average Canadian delinquency rate. The delinquency rate for Calgary rose by 32.2. per cent year over year, the second fastest in the country.

For Edmonton, consumer debt was the second highest in Canada, at $26,691, after Calgary. The growth of debt was only 1.7 per cent, one-half the growth rate for Canada. Edmonton’s delinquency rate of 1.4 per cent rose by an alarming 39 per cent. Edmonton’s increase is surprising because its economy, which is supported by provincial government employment and large institutional employers such as the University of Alberta, Capital Health, and various provincial agencies, is supposed to be in better shape than Calgary’s.

At the provincial level, growth in debt levels was subdued at 1.6 per cent- the lowest in Canada. This may reflect the fact that financial institutions are starting to constrain the growth of credit to Alberta residents. The delinquency rate in Alberta, at 1.4 per cent, is above the national rate of 1.1 per cent. While the growth in the delinquency rate nationally stood at 4.1 per cent, in Alberta the year-over-year increase was 40.3 per cent.

Alberta residents appear to have loaded up on debt during the upswing in energy prices after the 2007-07 financial crisis. Financial institutions operating in Alberta  are undoubtedly watching their loan arrears carefully as many of their debtors struggle to service their indebtedness.

Recent articles

Edmontonians hold average non-mortgage debt of $25,149- report1-12-17 EJ

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See also KPMG letter to creditors of 1031084 Alberta and 623735 Saskatchewan and KPMG website

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Lightstream Reources and associated companies are going through the CCAA process. The main creditors are first lien holders under an amended credit agreement dated 29 May 2015, holders of senior unsecured notes and second lien secured notes issued by Lightstream maturing in 1 February 2020 and 15 June 2019 respectively. This CCAA filing follows the execution of a forbearance agreement dated 15 September 2016. The applicants to this CCAA filing (Lightstream et al) will have access to cash accounts at T-D Bank. Financial advisors appointed by the Court order include TD Securities,RBC Dominion Securities, Goodmans LLP, Evercore Capital L.L.C., and BMO Nesbitt Burns.





Transunion press release

Alberta mortgage arrears up by 52%30-8-16 GMhalf-of-albertans-live-pay-to-pay-survey9-9-16-ej

This entry was posted in Bankruptcies on by .

About albertarecessionwatch

Former Director, Institute for Public Economics, University of Alberta and currently Fellow of the Institute. Former executive with Alberta Treasury Branches. Worked for the Alberta government for 12 years with Federal and Intergovernmental Affairs and Alberta Treasury. Areas of focus: financial institutions legislation and policy, government borrowing, and relations with credit rating agencies. Ph.D in Political Science (Uof A), Masters of Public Administration and BComm. (Carleton University). Author of Politics and Public Debt: The Dominion, the Banks and Alberta's Social Credit. Presently working on study of Alberta provincial agency board appointments.

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