Gap widens between financially stable Canadians and those struggling with debt, says report

Jenna Benchetrit · CBC News

· Posted: Feb 27, 2025 4:00 AM EST | Last Updated: February 27

Inderjeet Singh and his household are successful an antithetic situation. The mates owns a location successful Toronto, but aft involvement rates ballooned to 5 per cent, they enactment the location up for rent and moved to Montreal where they thought things would beryllium much affordable. 

A twelvemonth and a fractional later, they're inactive struggling nether the value of their monthly owe payments — and surviving successful a much affordable metropolis hasn't made things easier for their family.

"It's similar radical are stuck, and we are 1 of those who are stuck," said Singh during an interrogation with CBC News.

The fig of Canadians successful indebtedness is connected the emergence crossed the country and, according to a caller report, there's a increasing spread betwixt those who person benefited from declining involvement rates, and those who person fallen down from the higher costs. 

Credit reporting bureau Equifax said connected Tuesday that full user indebtedness crossed the state deed $2.56 trillion successful the last 4th of 2024, a 4.6 per cent summation compared to the aforesaid play a twelvemonth earlier.

The summation was partially driven by a emergence successful car loans from non-bank lenders. But financially stressed homeowners successful B.C. and Ontario are besides missing payments astatine higher rates, the study said, continuing a signifier of higher debt successful regions with pricier housing.

Ontario successful wide saw a higher complaint of missed payments astatine the extremity of 2024, the study said, coming successful 50 per cent higher than pre-pandemic levels.

"At 1 extremity of the spectrum, we bash person individuals who are weathering immoderate benignant of macroeconomic tempest rather well. On the different end, you person a radical who truly are inactive struggling," said Rebecca Oakes, vice-president of analytics astatine Equifax Canada. 

"We inactive person a agelong mode to spell earlier we tin commencement to spot immoderate benignant of levelling oregon stabilization," she added. 

Fixed complaint owe holders who locked successful debased rates during oregon earlier the pandemic are besides facing the imaginable of overmuch higher rates erstwhile they renew. About a cardinal mortgages owed for renewal successful 2025 could beryllium affected by those changes, according to the report.

"Therefore, arsenic you're coming up for renewal, determination are going to beryllium immoderate outgo increases apt to happen. And that's putting immoderate further stress," said Oakes.

WATCH | Thousands of Canadians falling down connected mortgages contempt complaint cuts: 

Homeowners extracurricular of Ont., B.C., faring better

Tuli Parubets, a owe broker successful Toronto, said that higher delinquency rates successful Ontario and B.C. spell hand-in-hand with bigger mortgages — and these payments, combined with precocious recognition limits and discretionary expenses, are present piling up for immoderate consumers.

"Know what's coming your way," Parubets said, referring to owe holders who person renewals coming up this twelvemonth and next. 

"Don't daze your strategy further by not knowing what your outgo would beryllium like. Reach retired to your bank. If your owe renewal is adjacent twelvemonth and it's going to beryllium 4 oregon 5 per cent, cognize what that outgo looks similar now," she said.

The Equifax study notes that immoderate homeowners, mostly extracurricular of Ontario and B.C., are faring amended than they were a fewer years ago. Missed owe payments among this radical "are much lower" than they were pre-pandemic, according to Oakes.

"They're not truly expanding astatine excessively accelerated a rate," said Oakes. That includes homebuyers successful provinces similar Alberta and the Prairies, which had immoderate of the country's lowest delinquency complaint changes successful precocious 2024 compared to a twelvemonth earlier, and were acold outpaced by Ontario.

Missed credit, car payments connected the rise

Meanwhile, missed payments connected recognition cards, recognition lines and car loans are connected the emergence among non-homeowners who are young, lower-income, oregon renting oregon surviving with family. 

The mean non-mortgage indebtedness per idiosyncratic reached astir $22,000 past quarter, according to Equifax — and adjacent arsenic the Bank of Canada cuts rates, the menace of tariffs could airs yet different obstacle to Canadians struggling during an affordability crisis.

"We each cognize that determination is simply a batch of macroeconomic uncertainty coming successful 2025. There's the speech of tariffs and immoderate of the interaction that mightiness person connected concern and concern and, potentially, employment," said Oakes. 

"Our interest is … you already person this widening gap. And is that going to get worse?"