BURST
Vancouver, burdened by high housing costs, had some of the highest debt-payment delinquency rates in the country last year, according to a financial report Tuesday.
The Money.ca report says Vancouver’s delinquency rates jumped to a record 19 per cent year over year, following Toronto at 24 per cent, revealing deep-seated financial vulnerabilities. Money.ca is a financial news and credit comparison site.
Overall in Canada, average debt levels have grown modestly, the report says, reflecting increased reliance on credit to meet basic living costs.
Delinquency rates, an indicator of financial distress, have surged dramatically, signalling a growing inability among many to manage their finances, the report says.
It blames the high number of Canadians defaulting on debt payments on stagnant wages, p ersistent inflation driving up the cost of essential goods and services, and more people using credit to put food on the table.
“Wage growth has not kept pace with inflation, leaving many Canadians unable to adjust to rising costs,” the report says.
“ Canadians are turning to credit as a temporary solution to financial strain, but rising delinquency rates suggest this approach is proving unsustainable for many.”
Overall in Canada, average non-mortgage debt increased modestly by 3.79 per cent year over year, reaching $21,810.
Delinquency rates, however, surged by 19.14 per cent, highlighting the growing inability of Canadians to manage their financial obligations, according to the report.
It also noted a Google search on bankruptcy is up slightly by four per cent over last year, suggesting some Canadians may be considering bankruptcy as a way to manage unmanageable debt. A search for garnishment, which relates to wage or asset seizure for unpaid debts was up by six per cent, according to the report.
A separate report earlier this year by the personal bankruptcy firm Sands & Associates found that nearly 44 per cent of respondents to its B.C. Consumer Debt Study were aged 55 or older. Eight in 10 were renters, with homeowners making up just 7.6 per cent of respondents.
The report said the rising cost of living in B.C. is driving the shift.