1.4 Million Canadians Missed Credit Payments in Q2

A new Equifax Canada report reveals a growing divide in financial stability across Canadian households, even as the overall rate of missed credit payments eased slightly in the second quarter. The credit bureau found that 1.4 million Canadians missed at least one credit payment in Q2 — an increase of 118,000 from the same period last year, but a small decline from the previous quarter.

Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, called the flattening in delinquency rates “a bit of good news,” noting that the broader trend is beginning to stabilize. However, she emphasized that the headline number masks increasing disparity among different groups of consumers. In particular, the financial gap between homeowners and non-homeowners remains pronounced.

Widening gap between homeowners and non-homeowners

Equifax’s analysis shows that Canadians without a mortgage are far more likely to miss payments than homeowners. Roughly one in 19 non-homeowners missed at least one credit payment in the quarter, compared with about one in 37 homeowners. Total consumer debt climbed to $2.58 trillion year-over-year, while average non-mortgage debt per consumer rose to $22,147.

Oakes pointed to several pressures behind these figures, including elevated unemployment in some sectors and broader economic uncertainty, worsened by trade disruptions. These forces have made it harder for many households to cover everyday expenses and service existing credit balances.

The report also highlights that younger Canadians are facing the greatest strain. Consumers under 36 appear particularly vulnerable to affordability pressures, job insecurity and limited access to low-cost credit.

Affordability crisis is affecting younger Canadians most

The Equifax data show that Millennials and Gen Z consumers experienced a 2% rise in average non-mortgage debt, reaching $14,304 year-over-year. Their 90-plus-day non-mortgage delinquency rate increased to 2.35%, a sharp 19.7% rise compared with the prior year. These increases point to mounting financial stress among younger cohorts as living costs and borrowing needs rise.

“The affordability crisis seems to be hitting younger consumers the hardest,” Oakes said. “Between rising costs, employment uncertainty, and limited access to affordable credit, many are struggling just to stay afloat.”

At the same time, many homeowners who secured lower mortgage rates during the pandemic face higher payments when their terms come up for renewal. Oakes noted that when mortgage payments increase at renewal, the strain often shows up in other areas of household finances — for example, missed credit card payments.

Regionally, Ontario stood out as a center of financial stress in Q2. The province’s 90-plus-day delinquency rate reached 1.75%, about 15.2 basis points higher than the national average, reflecting concentrated pressures in the province’s labour market and key industries.

Rates of missed payments are higher in Toronto and surrounding areas

Missed-payment rates were even higher in the city of Toronto and the surrounding regions, areas that have exposure to industries such as auto and steel that have faced tariff-related disruptions. While the gap in Ontario between homeowners and non-homeowners peaked last year, Oakes said that difference has begun to narrow modestly.

TransUnion’s second-quarter consumer credit report, released around the same time, reported consumer debt of $2.52 trillion — an increase of 4.4% year-over-year. That independent tracking reinforces the broader picture of rising household indebtedness across Canada.

Matthew Fabian, director of financial services research and consulting at TransUnion Canada, observed that subprime consumers are most likely to be affected by higher living costs and may turn to additional credit, such as credit cards, to cover everyday expenses. He contrasted that with other borrower risk tiers, where card balance growth has lagged inflation, suggesting those households are less reliant on credit cards to preserve purchasing power.

Read more about debt:

• How AI is helping Canadians budget, save, and tackle debt
• The MoneySense guide to debt management: How to get out of debt
• Canadians are turning to family—and credit—to stay afloat
• What to know before you use “buy now, pay later” in Canada