Canadians Face Increasing Debt as Living Costs Surge

Escalating living expenses are pushing a notable number of Canadians into financial difficulties, with nearly one in four accumulating new debt over the last year. A fresh survey conducted by the Office of the Superintendent of Bankruptcy (OSB) along with the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) reveals that more than half of Canadians (54%) are finding it tough to meet their financial obligations. In 2024, 4.2 out of every 1,000 adults filed for insolvency, marking an alarming peak since 2019.

Economist Moshe Lander from Concordia University highlighted concerns over this trend, pointing out that many individuals are living beyond their means and encountering difficulties in stabilizing their finances, even in their prime earning years.

According to TransUnion, consumer debt in Canada soared to $673 billion in the third quarter of 2025, reflecting an 18% increase from the previous year. Car loan debts significantly contributed, as average balances rose from $29,138 to $30,396, while credit card debt also escalated to an average of $4,652.

Younger households and urban homeowners are reportedly experiencing a surge in defaults on non-mortgage loans. Financial experts observe that the uptick in interest rates since 2022 has revealed financial strains that were previously obscured by lower rates.

Almost half of Canadians (48%) do not have enough savings to sustain themselves for three months. Financial advisor Stacy Yanchuk Oleksy suggests starting prudently with small, actionable steps to create an emergency fund, such as engaging in the 52-week savings challenge.

For managing debt, experts recommend evaluating all loans and establishing a precise budget. Approaches like debt consolidation, management plans, or consumer proposals may provide assistance. Bankruptcy should be a final consideration when other alternatives are unsuitable, enabling individuals to reclaim their financial footing.