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“Although subprime consumers do not make up the bulk of Canadian credit users, we are going to keep a close eye on this trend,” Wang said.

TransUnion is also witnessing rising delinquencies in Alberta for debt 90 days or older. The province saw the percentage of 90-day-plus delinquencies climb to 2.8 per cent in the first quarter of 2016, an 11.92 per cent jump from a year earlier. Saskatchewan still has the highest delinquency rate in the country at 3.04 per cent, but it was only up 5.56 per cent from a year ago.

British Columbia and Ontario saw a drop in delinquency rates in the quarter, 1.42 per cent and 0.8 respectively. On a national level, the delinquency rate reached 2.52 per cent in the first quarter, up slightly from 2.45 per cent a year earlier.

“When it comes to loan default rates, we are looking at two distinct groups: oil-sector provinces and the rest of the country,” Wang said. “We continue to see material delinquency increases in the oil provinces and we suspect it will continue over the next few quarters.”



Laurie Campbell, executive director of Toronto-based Credit Canada, says 90-day-plus delinquency rates mask a larger problem, as people struggle to make minimum payments.

“You need to look at overall indebtedness. A minimum payments is not a good financial choice. Over time it will erode your financial capacity to service that debt in the future,” she said, adding that flat income and an increase in payday loans are contributing to the overall debt problems.

Financial Post

gmarr@nationalpost.com

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