Canadians struggling with the rising cost of living are increasingly turning to debt to cover their
daily expenses, according to a new report from credit agency Equifax.
The data shows that the average Canadian now carries $20,744 in debt, excluding mortgages.
Monthly spending on credit cards rose by 17.5% in the first quarter of this year as people
struggle to keep up with inflation that is running at a 30-year high in Canada.
Bank and other lenders issued 31.2% more credit cards to consumers in the first quarter
compared to the same period last year. The average spending limit on new credit cards reached
$5,500, the highest it has been in the last seven years, according to Equifax.
Total consumer debt in Canada rose to $2.3 trillion over the past 12 months, said Equifax.
Canada’s inflation rate hit a three-decade high of 6.8% in April, according to Statistics Canada.
The Bank of Canada has taken notice of runaway inflation eroding financial stability and has
been aggressively raising interest rates to bring down consumer prices. Earlier this week, the
central bank raised interest rates by half a percentage point to 1.5%.
Economists increasingly expect the central bank to raise rates by a similar amount at its next
policy meeting in July.
