Equifax Canada’s quarterly Consumer Credit Trends Report this week indicated that Canadian consumer non-mortgage debt grew by 3.4% year over year for the quarter ending March 31, 2012. The largest increases were the result of growth in outstanding balances for automobile loans and leases; 10% greater in fact in comparison to Q1 2011.
With household debt recently reaching an all-time high of 150% of income the Bank of Canada has declared household debt levels as the number one risk to our economy.
As a collection agency with offices in Edmonton, Calgary and the GTA we recognize that the vast majority of consumers we inevitably end up dealing with are good people, with good intentions that have now simply arrived at the tipping point of having to either try to continue to rob Peter to pay Paul or, in the alternative, to make some hard choices in monthly budgeting in order to honour their outstanding financial obligations.
While our neighbors to the south have begun to deleverage, following the US housing meltdown that started in 2007, Canadian households continue to pile on debt.
Maybe for us the party, fueled by an ongoing consumer debt binge, will never end. But I doubt it. The big challenge however will be, who and how long is it going to take us to clean up the mess before mom and dad get home?!!