The recent recession did not ravage Canada to the same degree as it did in the U.S. The Canadian housing market prices have basically returned to pre-recession levels, the stock market has improved significantly and the Canadian dollar is close to parity with the American dollar, all positive developments for the Canadian consumer. Your average Canadian is feeling richer, especially when compared to recent times. The memory of the recession is still fresh in their minds.
A couple of less positive indicators include the fact that the unemployment rate is still high and the Bank of Canada, which had started a number of interest rate hikes in the summer, has stopped this trend due to a slowing of the economic rebound. In addition, the strong Canadian dollar could hinder the recovery of our manufacturing sector, since the goods we export to our largest trading partner, the U.S., are now more expensive for them.
Overall, the positive changes have more than offset the negative factors - at least in the short term. As a result, collection trends are generally moving in positive direction. We are experiencing a better response from our customers, as measured by payment activity. Even more encouraging is that our portfolios purchased in 2010 are liquidating better than International Financial Reporting Standards (IFRS). We expect this trend to continue.