Nearly One in Four Canadians Taking on New Debt

Rising living costs are pushing more Canadians into financial strain, with nearly one in four taking on new debt over the past year. A recent survey by the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) found that over half of Canadians (54%) are struggling to pay their bills. In 2024, 4.2 out of every 1,000 adults filed for insolvency, the highest rate since 2019.

Economist Moshe Lander of Concordia University said the trend is worrying because many people spend more than they earn and struggle to regain control over their finances, even during their prime working years.

Consumer debt in Canada reached $673 billion in the third quarter of 2025, up 18% from the previous year, according to TransUnion. Car loans were a major factor, with the average balance rising from $29,138 to $30,396. Credit card debt also increased to an average of $4,652.

Younger households and urban homeowners are seeing more defaults on non-mortgage loans. Experts note that the rise in interest rates since 2022 has exposed financial pressures that were previously masked by low rates.

Nearly half of Canadians (48%) lack enough savings to cover three months of living expenses. Financial advisor Stacy Yanchuk Oleksy recommends starting with small, manageable steps to build an emergency fund, such as the 52-week savings challenge.

To manage debt, experts advise reviewing all loans and creating a clear budget. Options such as debt consolidation, debt management plans, or consumer proposals can help. Bankruptcy may be considered as a last resort when other solutions are not feasible, allowing people to regain financial stability.