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Tuesday
Dec202016

Canadian Consumer Debt

How often do we hear that CMS (Citizen Main Street) is swimming in debt. By now its a Canadian thing that every month CMS is swimming in a bigger pool of debt.

We will spare you the figures, and graphs. Its usually one sound bite accompanying another sound bite until you start connecting your own dots.

Here is the deal....

Consumer debt is through the roof again, excluding mortgages (consumer credit) it increased again.

Mortgages and the housing market lets not even go there...huge clouds all over the place.

Delinquency is almost at an all time low, seems like CMS still has money to make payments.

Yes...we know Alberta has been hit hard and delinquency is a little higher.

Its the eastern provinces that are increasing the level of consumer credit.

We could keep on going, but hopefully these sound bites are familiar to you too.

If mortgages are excluded, and credit card debt is under control with balances increasingly paid off on a monthly basis. You have to wonder "What's left?"

The second biggest purchase by CMS after a house is a car. Its a record year in Canada...never before have so many vehicles (trucks) been sold, especially in the eastern provinces (Ontario/Quebec).

What is driving up consumer credit (debt) in Canada? Simple automotive financing and leasing.

Will this trend continue in 2017?

Will CMS continue with "mobility for a monthly payment" in 2017?

Will manufacturers continue to enable "rolling over deficiencies" in 2017?

Will software continue the shift to a longer term to uphold a constant monthly payment in 2017?

What will happen if "somebody" steps in and disrupts the "roll over" and "pull ahead" guidelines?