Canadians’ debt woes worsen with sharp increase in missed payments
More and more people in Canada are struggling to pay off their debt, according to a new report.
Money.ca, a financial news and comparison site, released its “Canada’s Rising Debt Crisis” study, revealing just how vulnerable Canadians are now when it comes to finances.
After examining data across provinces, cities, and age groups, the report found that while non-mortgage debt rose a modest 3.79 per cent year-over-year, delinquency rates (inability to pay outstanding debt) jumped 19.14 per cent, reaching 1.43 per cent. Money.ca says this is a signal that more Canadians are struggling to meet their financial obligations.
Money.ca
According to the study, this has all been fuelled by inflationary pressures, high housing costs, and rising interest rates.
“Delinquency is outpacing debt growth, and that’s a red flag,” said Romana King, senior editor at Money.ca.
“This data shows that Canadians are under real pressure — especially younger and older demographics. It’s a wake-up call for consumers and policymakers alike to focus on sustainable financial support and education.”
When it comes to which provinces in Canada have the hardest time paying debt, the study found that Quebec had the “steepest rise in delinquencies” at 24.16 per cent.
Ontario follows closely behind with a delinquency rate of 23.78 per cent. Alberta and British Columbia round out the top four with delinquency rates of 17.39 per cent and 15.33 per cent, respectively.
Newfoundland saw the highest debt growth (+7.78 per cent), but Canadians there seem to be doing okay when it comes to paying off debt, with a steady delinquency rate of -0.46 per cent, the lowest in the country.
Money.ca also broke down delinquency rates between major cities.
“Toronto and Vancouver, burdened by high housing costs, saw delinquency rates rise by 24.16 per cent and 19.00 per cent, respectively,” reads the report.
In comparison, smaller cities in Canada, like Halifax and St. John’s, showed relative stability, with modest debt growth and minimal delinquency increases.
The study noted a generational divide. Young adults (18 to 25) faced a 17.02 per cent rise in delinquency rates, “driven by limited financial experience and precarious incomes.”
Canadians nearing retirement (56 to 65) saw the largest debt increase (+6.28 per cent) and a 16.88 per cent rise in delinquency rates, “reflecting financial strain in pre-retirement years.”
Money.ca found that Canadian retirees (65+) had the lowest average debt ($14,575), but skyrocketing healthcare and living costs contributed to an 8.12 per cent increase in their inability to pay off debt.
The report also delved into Google search trends, which revealed hardships in Canada and debt management.
Searches for “budget planner” rose by 152.86 per cent compared to the same time last year, reflecting growing interest in financial planning.
Searches for “payday loans” also increased by 27.6 per cent, indicating an increase in short-term borrowing needs.