Keeping up with the Economy: Canadians Continue to Adapt their Credit and Financial Decisions

Core Insights - Consumer debt in Canada reached $2.46 trillion at the end of Q1 2024, a 3.5% increase from the previous year, indicating rising financial strain among consumers [2] - Mortgage delinquency rates are climbing in high-priced housing markets like Ontario and British Columbia, with severe delinquency in Ontario exceeding $1 billion for the first time, double the pre-pandemic level [5][6] - The housing market in Alberta showed resilience with a 10.6% increase in new mortgage originations compared to Q1 2023, attributed to high interprovincial migration [4] Consumer Behavior - Consumers are adapting their credit decisions due to financial stress, with many extending mortgage lengths to reduce payments despite longer loan commitments [3] - There has been a nearly 19% increase in the number of credit score checks by consumers compared to the same period last year, indicating a shift towards more proactive financial management [3] - Lender switching has become more common, with 25.8% of consumers choosing different providers in late 2023, up from 21.7% in 2022 [16] Delinquency Trends - Over 1.26 million consumers missed at least one payment in Q1 2024, marking a 12.2% increase from Q1 2023, with Ontario, British Columbia, and Quebec experiencing above-average jumps in missed payments [11] - Delinquency rates for credit cards and other non-mortgage debts are rising, with credit card full-payment rates dropping from 65.6% in 2023 to 64.5% in Q1 2024 [7] - The average loan value for new mortgages reached $321.7K, a 3.1% increase year-over-year, despite a decrease in new mortgage originations [9] Regional Analysis - Ontario's average debt in Q1 2024 was $21,869, with a 2.51% year-over-year increase and a delinquency rate of 1.40%, reflecting a 28.18% rise from the previous year [14] - Alberta's average debt was $24,157, showing a slight decrease of 0.69% year-over-year, with a delinquency rate of 1.70% [14] - Major cities like Toronto and Vancouver have seen delinquency rates rise above pre-pandemic levels, with Toronto's mortgage delinquencies increasing from 0.09% to 0.14% since Q1 2020 [10]