“Positive momentum around key consumer credit trends and performance” combined to boost the index reading in the second quarter, the report said. The demand for consumer credit began to rise and credit applications reached pre-pandemic levels.
Overall, credit applications were up 5% year over year in June, led by a sharp increase in credit inquiries from low-risk consumers, TransUnion reported.
“With the economy reopening and many Canadians returning to some normalcy, we expect to see overall consumption and demand ramp up,” said Matt Fabian, director of financial services research and consulting at TransUnion, in a release.
That said, a second-quarter consumer survey showed that many remained cautious about adding to their debts, with 21% of respondents planning to apply for new credit or to refinance existing credit in Q2, down from 26% in the first quarter.
Additionally, total credit card balances declined by 3.9% year over year in the second quarter, and balances on lines of credit fell by 2.2%.
“We are seeing consumers taking advantage of their higher liquidity to pay down debt,” said Fabian. “According to TransUnion’s recent Consumer Pulse survey, 46% have reduced their discretionary spending and 20% said they paid down debt faster.”
The firm noted that, while credit origination volumes have increased, they haven’t yet returned to pre-pandemic levels.
“Growth in new credit continues to be fuelled by the mortgage market as the pandemic drove a housing market boom,” it said.
Credit performance has also remained strong, the report said. It noted that overall consumer delinquency declined by 0.63% year over year in the second quarter to 1.96%.
Future credit trends also look positive, amid continued economic recovery and low interest rates. Yet this remains subject to the trajectory of the pandemic and its effect on the economy.
“While pandemic-related threats to the economy do remain, as Canada continues to reopen, we expect consumers to increase their spending and for the recent acceleration in new credit growth to continue,” said Fabian.
“Lenders should consider ramping up their acquisition strategies and channels accordingly. Market competition for acquisition and share of wallet will be high, as debt levels remain well below pre-pandemic levels,” he added.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
