Household finances remained padded by pandemic in Q3: Fitch

By James Langton | November 12, 2021 | Last updated on November 12, 2021
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Canadian household finances remained robust in the third quarter, but some deterioration is expected in the months ahead as pre-pandemic spending habits return, says Fitch Ratings.

In a new report, the rating agency said that credit card charge-offs hit their lowest level on record in September while other metrics, such as delinquencies and monthly payment rates, continued to improve in the third quarter —  remaining stronger than pre-pandemic levels.

“The state of the Canadian consumer has overall improved since the start of the pandemic, evidenced by [the] high household savings rate, lower card delinquencies and chargeoffs, along with lower insolvency filing volumes,” the report said.

But looking ahead, Fitch expects conditions to weaken a bit, with metrics such as delinquencies and charge-offs trending back up towards pre-pandemic levels; “as the economy continues to recover and consumers return to more normal spending behaviour with the easing of restrictions,” the rating agency said.

At the same time, it noted that households have continued to add debt, mainly mortgage debt, “which could become a concern for some as the broad-based government emergency support has ended and interest rates are expected to increase ahead of the Bank of Canada’s original expectation amidst inflationary pressures and a recovering job market.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.