Commonwealth_ Equifax Canada‘s latest report provides foreboding consumer debt and credit performance insights that outline moderate improvement in delinquency trends and mounting financial stress among select Canadian segments.
In the second quarter of 2025, 1.4 million Canadians were delinquent on one or more credit payments. This number represents an increase of 118,000 compared to the same quarter in 2024. While modestly lower than the first quarter of this year, it is a snapshot only of modest stabilisation in overall delinquency rates. Even with some comfort there, the bigger picture is one of rising financial polarisation among consumers, with homeowners vs. non-homeowners particularly stark.
Financial upset, layoffs, and sustained trade tensions have added pressure on many families, where it is increasingly tough to keep up with payments on ordinary bills. Younger buyers, especially those below the age of 36, have been affected the most. Millennial and Gen Z buyers experienced their median non-mortgage debt increase two per cent year-over-year to $14,304. Their 90-plus-day delinquency on non-mortgage debt also increased considerably to 2.35 per cent, a 19.7 per cent increase from last year.
The affordability crisis has left young Canadians on unsteady footing. The inflation in living expenses, precarious work, and limited access to cheap credit have pushed them into debt. They are increasingly relying on credit cards and other forms of short-term credit to meet their everyday needs, which is causing them to accumulate more debt.
A second, equally pressing issue confronts homeowners. Some members of the Canadian public took up low-interest borrowing at the outset of the pandemic, but now the loans are coming up for renewal at much higher interest levels. The transition to higher monthly payments has contributed to family stress. In some cases, when house payments are in excess of what can be paid, the first sign of economic stress is falling behind on secondary debt, such as credit cards.
Ontario is also the delinquency-whipped province. Ontario’s second-quarter 90-day delinquency was 1.75 per cent, 15.2 basis points above the national average. The Toronto market and the surrounding area also posted more negative signs of financial strain, partially because it’s exposed to distressed industries such as steel and autos, which have been battered by tariffs and trade woes. However, the gap between homeowners and non-homeowners in Ontario, which had widened substantially a year ago, began to narrow down in recent times.
This decrease is similarly indicated in other reports by credit-monitoring agencies. TransUnion’s second-quarter report had Canadian consumer debt at $2.52 trillion, 4.4 per cent more than a year earlier at the same point. Subprime customers, whose credit scores are typically inadequate, are most vulnerable, always relying on borrowed money to pay for increasing living costs. This tendency again places them at risk of losses and aggravates the threat of delinquencies.
Equifax data also indicate consumer debt owed rose 3.1 per cent from last year to $2.58 trillion during the second quarter of 2025. Consumer non-mortgage debt rose to $22,147 as well. Home and non-home worlds are different: almost one in 19 non-mortgagor Canadians were delinquent on at least one credit account, compared with one in 37 homeowner households.
Overall, the findings reveal a complex Canadian credit market. While headline delinquency rates rise, underlying trends suggest increasing divergence on age, income, and homeownership fronts. Younger households with larger debt levels and smaller financial margins are being disproportionately pinched. Meanwhile, homeowners who increase their borrowing when redrawing a mortgage are starting to experience pressure from other debts.
The cumulative effect of economic volatility, rising cost of living, and changing patterns of debt reflects the vulnerability of Canadian consumer finances. Without increased affordability and access to sustainable credit, the gap between creditworthy households and households that are facing increasing stress will grow even wider.
