• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days If hydrogen is the answer, you're asking the wrong question
  • 1 day How Far Have We Really Gotten With Alternative Energy
  • 11 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Oil Patch Pushes Up Canada’s Credit Card Delinquency Rate

Serious credit card delinquency rates rose by 3.2 percent in Canada last year, mostly due to double-digit rises of those rates in the oil patch provinces—Alberta and Saskatchewan—TransUnion said in its Canada industry report on Wednesday.

The delinquency rate 90+ DPD -- the ratio of balances 90 or more days past due -- for all of Canada was 4.21 percent as of Q4 2016, up from 4.08 percent in Q4 2015. The rise can be attributed to the oil patch provinces, as both Alberta and Saskatchewan saw annual rises of more than 22 percent, while delinquency rates declined in non-energy provinces such as Ontario and British Columbia, TransUnion said.

Between the fourth quarter of 2015 and the fourth quarter of 2016, serious credit card delinquency rate jumped by 23 percent in Alberta, to stand at 4.6 percent, and soared 22.7 percent in Saskatchewan, to come in at 3.96 percent, but still below the Canadian average of 4.21 percent.

At the same time, combined card delinquency rates in non-energy provinces fell in each of the past three quarters, TransUnion said.

In the summer of 2015, when it had become evident that oil prices would stay lower for longer, TransUnion said that there were already signs of liquidity constraints in Alberta and Saskatchewan, warning of double-digit rises in delinquency rates in the oil-rich oil-dependent provinces.

Related: Oil Prices Under Pressure From Record Breaking Inventories

Alberta’s heavy dependence on oil and the large number of lending accounts held by consumers living there place added pressure on the province when there are major moves in oil prices,” TransUnion said back in July 2015.

Credit card delinquencies are one of the last links in the domino chain of low oil prices that lead to lower investment, lower production, higher unemployment, lower disposable income, and increased liquidity constraints.

Last year, investments in the oil and gas industry of Alberta, as well as production of the commodities, fell by a substantial rate on the back of the persistent oil price rout, according to the province’s Energy Regulator.

By Tsvetana Paraskova for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News