While Alberta's economy is positioned to lead Canada in growth over the coming years, the province faces a troubling paradox: its residents are falling behind on debt payments at the highest rate in the country, according to a new report from TransUnion.
The Alberta Paradox: Economic Growth Meets Financial Strain
TransUnion's latest credit industry insights report reveals that geographic disparity in credit performance across Canada widened significantly during the third quarter of 2024. Alberta's credit delinquency rate climbed from 2.21% last year to 2.31%, marking the sharpest increase nationwide and substantially exceeding the Canadian average of 1.77%.
This deterioration reverses an improving trend seen in recent years and comes despite strong economic projections for the province. Bank of Montreal economists forecast Alberta's real gross domestic product to grow by 2.1% this year and 2.3% in 2026, well above the national projections of 1.2% and 1.4% respectively.
Unemployment Drives Delinquency Spike
The report identifies Alberta's rising unemployment rate as the primary driver behind the increasing delinquency numbers. The province currently suffers from one of Canada's highest jobless rates at 7.8%, creating financial pressure even as the broader economy shows strength.
"The jump in delinquencies is driven by a higher increase in the unemployment rate in the province," stated TransUnion, noting that this trend reversal comes despite many of Alberta's resources being sheltered from recent tariffs that have impacted other regions.
Ontario and Quebec also experienced credit performance deterioration over the past year, with Ontario's unemployment rate reaching 7.9% in September as auto, steel, and aluminum tariffs impacted the province's industrial and manufacturing sectors. Ontario's credit delinquency rate climbed to 1.9%, while Quebec's rate rose to 1.26%.
Growing Divide Between Financially Secure and Vulnerable
TransUnion's analysis reveals a deepening financial divide not only between regions but also between different segments of the population. While short-term delinquency rates (30 days or more past due) have declined, late-stage delinquencies (90 days) are increasing significantly.
"This contrast underscores a critical dynamic of this recovery," the study noted. "While overall delinquency rates may appear stable or improving, the financial health of the most vulnerable consumers is worsening and the gap between those managing to stay current and those falling deeper into delinquency is widening."
The report highlights that credit card balances have returned to pre-pandemic levels, indicating that rising living costs are placing pressure on all Canadians. However, below-prime consumers have experienced an even sharper increase in balances, "signalling that financial pressure is disproportionally impacting higher-risk borrowers."
A recent Royal Bank of Canada poll on financial anxieties found that 48% of surveyed Canadians feel they can no longer maintain their standard of living, reflecting the growing economic pressures facing households across the country.
TransUnion's consumer credit industry indicator fell six points year-over-year in the third quarter, signaling a clear deterioration in the overall health of Canada's credit market and highlighting the challenging financial landscape many Canadians now navigate.
