Canadian Consumer Credit Quality Deteriorating: RBC

“Cracks are starting to show in more and more places,” says Royal Bank of Canada analyst.

There are growing concerns about the declining quality of Canadian consumer credit.

According to RBC credit analyst Vivek Selot, “Cracks are starting to show in more and more places.”

A Bloomberg News report says “rising interest rates and a cooling real estate market are prompting speculation the debt burden poses a threat to the financial system.”

The key concern is the ‘roll rate,’ defined as “the percentage of credit card users who “roll” from early stage delinquencies to 60-89 day delinquencies.”

The National Bank of Canada’s Canadian Credit Card Trust program is seeing the highest roll rates since 2008, while the roll rate from CIBC’s CARDS II program is above the 10-year average.

While the analyst said “consumer credit quality seems benign,” the concern is the trend, which is getting more and more concerning.

Said Selot, “Considering that fragile household balance sheets could be a precipitating factor for the credit cycle to turn, any signs of consumer credit quality deterioration seem worthy of attention.”

At both the individual and governmental level, a large amount of debt has been accumulated at low interest rates, which has helped mask much of our underlying economic weakness. The burden of consumer debt has also been made worse by increasing taxes and rising costs, as people are pushed to take on more debt just to maintain their standard of living.

Yet, regardless of the mitigating circumstances, we know that the cost of debt must be paid one way or another. And as we saw in 2008, things can go from the status-quo to a crisis in almost no time at all.

Spencer Fernando

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Ivan Hawkes

With every city, every province, and certainly the federal government spending without constraint or common sense, Canada is in trouble. Justin foolishly GAVE AWAY MULTIPLES OF BILLIONS. Rachael Notley is considering Alberta pay for pipe lines to be built (government has no place in business). Ontario faces unimaginable debt with the LIEberal out of control spending. Canadian families are facing heavy pressure in just staying afloat. Savings are a concept of the past. The inclination of separation by the western provinces is becoming more serious than ever. Facing reality will not be part of any level of Canadian government thinking,… Read more »

Jill Ward

how long before canadians are having to walk out on their mortgages, car loans and so on because of this liberal mess and their obsession with shopping, shopping, shopping??? Remember, trudeau passed legislation for banks to seize funds from our accounts , RRSP’s and so on if their profits begin to fall and they will as the country and canadians are all going bankrupt!! Well, canadians ignored this as they have everything trudeau has done and while his , morneaus etc money is all OFFSHORE , PROTECTED FROM THE TAX MAN AND CANADIAN BANKS, OUR money is unprotected and apparently… Read more »


We always hear of the Debt to GDP ratio. What is not mentioned is that “debt” is only Government debt. It doesn’t include personal, provincial or Municipal debt. The GDP number is also false, as the amount of spending by Canadians is credit card and mortgage spending. nothing is paid for, yet it is included as Gross Domestic Product. Canada and Canadians are in way over our heads at what, 175% or so? CDIC only insures our deposits and investments up to $100,000. Anything over that is an open target for the Trudeau Liberal Bail In which he brought in… Read more »

c olleen fogarty

We are dead last for personal credit debt .