The latest data from Equifax Canada paints a concerning picture of the financial health of the nation. A staggering 1.4 million Canadians missed at least one credit payment in the first quarter of 2025, signaling rising financial stress amid persistent economic uncertainty. This trend highlights a growing divide between those who are managing and those who are falling behind.
This isn’t just a statistic; it’s a warning sign about the mounting pressures of the Canadian cost of living crisis, rising unemployment, and the impact of higher interest rates on household budgets.
The “Why” Behind the Missed Payments
According to Rebecca Oakes, Equifax Canada’s vice-president of advanced analytics, the primary drivers are clear. “In order for anybody to kind of keep making the payments … you need to have an income, you need to have good employment,” Oakes stated. The report links the rise in missed payments directly to:
- High Cost of Living: Everyday expenses continue to strain budgets.
- Growing Unemployment: Job market instability reduces household income.
- Economic Uncertainty: Rising trade tensions and a slowdown in discretionary spending are creating a ripple effect that impacts employment levels.
Even as consumers cut back—with average monthly credit card spending falling by $107—many are still unable to keep up.
A Closer Look at the Rising Consumer Debt
The report reveals critical details about the nature of this growing debt problem. Total consumer debt in Canada climbed to $2.55 trillion, a four percent increase from the previous year.
- Non-Mortgage Debt Surges: Delinquency rates for non-mortgage debts (like credit cards and auto loans) jumped by 8.9% year-over-year.
- Mortgage Holders Feel the Pinch: While lower, the delinquency rate for mortgage holders still rose by 6.5%.
- Younger Canadians Disproportionately Affected: The most alarming trend is among younger consumers, where credit card delinquency rates soared by a massive 21.7%. This highlights a generation struggling to achieve financial stability.
Ontario Becomes a Financial Stress Hot Spot
The financial strain is not distributed evenly across the country. The report identifies Ontario as a hot spot for financial stress. The province saw its 90-plus day mortgage delinquency rate surge significantly since last year, reaching 0.24%. Ontario also led the country in the growth of non-mortgage delinquency rates, making it a focal point of the current debt crisis.
The Looming “Great Renewal” and Its Impact
Many Canadian homeowners who secured historically low interest rates during the pandemic are now facing the “great renewal.” As these mortgages come up for renewal at today’s much higher interest rates, it is adding significant pressure to household debt levels and is a key contributor to the rising delinquency numbers.
What This Means For You and Key Takeaways
This Equifax report is a crucial indicator of the economic climate. It underscores the importance of proactive financial management.
- Review Your Budget: With rising costs, it’s essential to track your income and expenses carefully.
- Tackle High-Interest Debt: Prioritize paying down credit card balances and other high-interest loans.
- Prepare for Mortgage Renewal: If your mortgage is renewing soon, speak with a mortgage professional now to understand your options. Don’t wait until the last minute.
- Seek Help Early: If you are struggling to make payments, contact your lenders or a non-profit credit counsellor immediately. Taking action early can prevent more serious financial trouble.
The current economic environment demands caution and careful planning. Understanding these trends is the first step toward protecting your own financial future.