Household stress is concentrated

Canada’s household debt picture looks steadier in the aggregate than it does on the ground, where missed payments and insolvency risk are clustering among specific borrowers. (bnnbloomberg.ca, barrie360.com) Bank of Canada officials said in the 2025 Financial Stability Report that households have been carrying less debt relative to income on average over the past 12 months, even as “pockets of financial stress” persist. The report said the trade war, a softer economy and job losses could worsen those strains. (bankofcanada.ca) Equifax Canada said on February 24, 2026, that financial health “continued to widen” by the end of 2025: older consumers with higher credit scores were more resilient, while younger borrowers and consumers in Ontario and Western Canada weakened. Its fourth-quarter data also said holiday spending restraint softened the usual January credit-card delinquency spike. (equifax.ca) That split has shown up for more than a year. Equifax said on February 25, 2025, that some Ontario mortgage holders were already in “severe financial distress,” with mortgage delinquencies more than 50 per cent above pre-pandemic levels, while total consumer debt reached $2.56 trillion at the end of 2024. (equifax.ca) By May 27, 2025, Equifax said 1.4 million people in Canada had missed a credit payment and non-mortgage delinquencies had climbed to levels not seen since 2009. The same release said refinancing and renewals were dominating the first-quarter mortgage market. (equifax.ca) Credit counsellors are seeing the same divide in household budgets. Barrie 360, citing Credit Canada chief executive officer Bruce Sellery, reported that requests for help rose 31 per cent last year, including from people without a single shock like job loss or divorce who simply could not absorb higher living costs. (barrie360.com) The pressure point is mortgage renewal. A Bank of Canada staff note published in July 2025 said a newer mortgage dataset gives a month-by-month snapshot of outstanding loans at federally regulated lenders, allowing staff to simulate how payments change when borrowers renew into higher rates. (bankofcanada.ca) That means lender exposure will not be uniform even if national averages look manageable. The borrowers under the most strain are concentrated in narrower groups by age, province, credit score and loan type, and those are the files that matter as renewals keep rolling through. (bnnbloomberg.ca, equifax.ca, bankofcanada.ca)