2015 Canadians still increasing debt despite timely payments

Are Canadians getting better at paying down debt? For the third quarter of 2015, delinquent loans, which are overdue by more than 90 days, fell to an all-time low of 1.05 per cent across the country. But that doesn’t mean our debt has been decreasing; the average Canadian non-mortgage debt actually rose by two per cent, from $20,891 to $21,312 over the past year. And mortgage debt has increased even further during that time span, driving household debt up by five per cent. So while we might be making our payments on time, many Canadians are still increasing their debt—to a grand total of $1.59 trillion.

While the national 90-day delinquency rate ticked down from 1.10 per cent last year, some provinces saw a notable increase in delinquencies, particularly out west. In the midst of oil-patch layoffs, delinquency rates rose by 13.4 per cent in Alberta and 8.5 per cent in Saskatchewan. In Newfoundland, where the economy was boosted in better days by offshore oil drilling, the loan delinquency rate rose by 5.8 per cent in the past year. What’s more, all three of these provinces exceed the national average when it comes to consumer debt—in Alberta’s case, by more than $6,000.

Long considered one of Canada’s best provinces for employment, Alberta lost another 15,000 jobs in November and saw its unemployment rate climb to 7.0 per cent, putting it in line with the national average. Saskatchewan is actually becoming the place to be employed; its 5.5 per cent unemployment rate is the lowest across Canada by a significant margin, and it actually decreased slightly in November. For Albertan job seekers outside of the oil industry, it might be time to start looking across the border.

Even moving to a neighbouring province can become more difficult when you’re carrying debt. November house prices in Calgary have dropped to their lowest point since 2008, which means more recent homebuyers could be taking a loss if they chose to sell. As such, home sales are down by 29 per cent from last year. Fort McMurray, the nearest city to the Alberta oil sands, has seen its home prices plunge by 20 per cent over one year. What was once considered the most stable, appreciable asset you could buy has fallen into uncertainty in Wild Rose Country.

How to cope with debt over the holidays

Suffice to say, if you’ve been hit with an unexpected job loss and find yourself living off a severance or tapping into emergency savings, you’ll want to manage your holiday spending. It’s probably not surprising that one holiday spending survey found that Albertans plan to spend 10.6 per cent less than last year during the holidays. Paying down debt might not be a top priority right now, but you should be looking for ways to avoid increasing it in December.

The first thing to do is set a holiday budget. Include any expenses that aren’t normally found in your monthly budget, such as gifts, decorations and holiday food. It’s important to have a realistic budget for the holidays that takes into account your current financial situation. Once you set your budget, you should stick to it.

Considering the economic circumstances, it might not be surprising that some people will be cutting back on gift-giving this year. If that’s the case for you, you’ll want to make sure to give friends and family a heads-up, so they won’t feel pressured to buy something for you if you’re unable to return the favour. And remember, it’s the thought that counts. You can always come up with homemade gifts and craft creations that your loved ones will appreciate. The greatest gifts don’t have to come from a store.

How do you plan on saving money for the holidays? Join the conversation on Twitter using the hashtags #DebtFreeDecember #BDOdebthelp