The province whose economy is expected to lead the country over the next few years also has the highest

credit delinquency rate in Canada, according to a report out today. TransUnion’s credit industry insights report found that geographic disparity in credit performance in Canada widened in the third quarter and it’s Alberta that is falling behind.

The province’s delinquency rate rose from 2.21 per cent last year to 2.31 per cent, the sharpest increase in the country that topped the Canadian rate of 1.77 per cent.

The jump in delinquencies is driven by an higher increase in the

unemployment rate in the province and reverses an improving trend seen in recent years, said TransUnion.

With many of its resources sheltered from tariffs, Alberta’s economy is expected to lead the country this year and next. Bank of Montreal economists expect the province’s real gross domestic product to grow 2.1 per cent this year and 2.3 per cent in 2026, well above the forecast for country-wide growth of 1.2 per cent and 1.4 per cent.

Yet the province, which has experienced massive population growth in recent years, has one of the highest jobless rates in Canada at 7.8 per cent.

Ontario and Quebec are the two other provinces that have seen a deterioration in credit performance over the past year.

Ontario’s unemployment rate rose to 7.9 per cent in September as

auto, steel and aluminum tariffs took their toll on the province’s industry and manufacturing sectors.

Its credit delinquency rate climbed to 1.9 per cent and the rate in Quebec, which has also been hit by tariffs, rose to 1.26 per cent.

The report reveals a growing divide not just between regions, but also between those who are financially secure and those who are vulnerable.

Short-term delinquencies rates (30 days or more past due) have declined, but late-stage delinquencies (90 days) are on the rise, which TransUnion says shows that those who do fall behind are struggling more severely.

“This contrast underscores a critical dynamic of this recovery,” said the study.

“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.”

Credit card balances are back up to pre-pandemic levels, suggesting that the rising cost of living is turning up the pressure on all Canadians, it said. But there has been an even sharper increase in balances for below-prime consumers, “signalling that financial pressure is disproportionally impacting higher-risk borrowers.”

A recent poll by Royal Bank of Canada on Canadians’ financial anxieties found that 48 per cent of those surveyed feel they can no longer maintain their standard of living.

The growing pressures are reflected in TransUnion’s consumer credit industry indicator which fell six points in the third quarter year over year, signalling a deterioration in the overall health of the Canadian credit market.

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The outlook of Canadian businesses perked up this month, according to the

Canadian Federation of Independent Business. Its business barometer for the 12-month outlook rose into positive territory, hitting 55.5. (Anything over 50 means more businesses are expecting strong performance than weaker performance.)

Confidence among retailers jumped 14 points to 57, the best reading this year, but still shy of its historical average.

The survey was taken between Nov. 4 and 11, after the federal budget was tabled, suggesting that businesses liked what they saw in Prime Minister Mark Carney’s pro-growth agenda, said Robert Kavcic, senior economist at BMO Capital Markets.

“Ultimately, we will still need certainty on the trade file to really let businesses run with capital spending and hiring programs (where plans remains very muted),” said Kavcic.

“If we can somehow get that in the months ahead, alongside lower rates and fiscal stimulus, the Canadian economy could turn the corner.”

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McLister on mortgages

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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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