Canadians are still on target for a record year of personal debt despite ending 2013 by making a small dent in the money they owe, says credit monitoring agency TransUnion.

At the end of last year, Canadians owed a total of $27,368 on such things as lines of credit, credit cards and car loans, TransUnion said in a study released Wednesday.

That's down $117, or 0.42 per cent, from $27,485 in the fourth quarter of 2012 — the highest level of non-mortgage debt on record.

"We've been told over and over and over again from so many places that we've got to get this debt down and we can't make it happen," said Thomas Higgins, TransUnion's vice-president of analytics and decision services.

The dip is only a brief hiatus, as the general trend is that debt is rising, Higgins said in an interview with CBC’s The Lang & O’Leary Exchange.

He predicted Canadians will need to face more “pain” before they give up their spendthrift ways.

“The two things we look at are interest rates – if they bumped up considerably people would be forced to start saving more and bring that debt down. The other is unemployment – if there is a big dip in employment people will have no ability to pay those bills and will have to ratchet back what they do,” he said.

TransUnion is sticking by its prediction that average consumer's total non-mortgage debt will hit an all-time high of $28,853 by the end of 2014.

"There's nothing to give us any indication that the debt levels are going to start to come down in any noticeable chunk," Higgins said.

"Right now, we're still trending in that direction (to higher debt), for sure."

Paying enough so 'still in good standing'

Higgins said Canadians started to pile on debt in the years before the 2008 recession. He said he'd have to see Canadians' personal debt being reduced consistently by $500 to $1,000 over four to six quarters before he would say "we're sorting of heading somewhere."

In the last quarter of 2013, consumers' credit card debt and debt on lines of credit were down a bit, Higgins said.

But consumers spent a little less on holiday shopping only because they got "better deals" rather than consciously cutting spending, he said.

The study also found that loan delinquencies in the quarter ended Dec. 31 were down, meaning that consumers were making minimum payments on their debts.

"We may not be paying all of it, but we're paying enough down so that you're still in good standing."

But Higgins cautioned that if anything impacts the economy, the markets or interest rates, delinquency rates are usually impacted first.

Vancouver highest, Montreal lowest debt increase

Meanwhile, the study also found that Vancouver residents experienced the biggest increase in consumer debt, hitting $41,077 at the end of last year, up seven per cent from $38,357 in 2012.

On the other hand, those in Montreal managed to reduce their debt by 5.5 per cent from $19,651 to an average of $18,563, the lowest among residents of all major Canadian cities.

Higgins said Vancouver generally has higher incomes allowing consumers to take on more debt, while consumers in Montreal usually save to buy bigger items or pay with debit cards.

"Both in Alberta and B.C. they’ve had higher debt levels, particularly when you get into Vancouver. A lot of factors [are] involved, particularly income levels, unemployment, the real estate market has really had an impact there," he said.

In a report on Tuesday, Statistics Canada said Canadian families have become wealthier over the past several years, with net worth rising despite the well-documented growth in household debt and a setback from the recession.

However, there were big differences across age groups, regions and family types and economists noted that the biggest single reason overall for the improvement was rising house prices, which are widely expected to moderate or even fall in the next few years.