Consumer debt rises to record high in Canada

 

 

Consumer debt is on the rise in Canada, reports say. Debt has hit a record $2.5 trillion, according to the credit bureaus. Consumer debt hit a record high in the third quarter due to higher living costs and rising unemployment. People who borrow money for the first time have a large increase in repayment defaults. Equifax reports that this is much higher than last year.

Newcomers to the country face challenges adjusting to the Canadian economy, the report said. Equifax Vice President of Advanced Analytics Rebecca Oakes said high inflation and rising unemployment are putting new arrivals under financial pressure. More than 1.3 million consumers defaulted on their loans in the third quarter, the bureau said. This is an increase of 10.6 percent from a year ago. TransUnion, another credit bureau, said overall consumer credit rose 4.1 percent in the third quarter as more Gen Z consumers entered the credit market. Millennial and Gen Z consumers account for 45 percent of all household debt in Canada.