Canada's insolvency rates highest since 2009, says Equifax report

Hinzugefügt: 2026-05-27

[00:00:00]A new Equifax Canada report says insolvency volumes in the country have risen to the highest level since 2009.

[00:00:07]Here to talk more about it is Rebecca Oaks, vice president of advanced analytics at Equifax Canada. Rebecca, thank you very much for joining us.

[00:00:17]Thank you for having me. All right.

[00:00:19]15 years since 2009, that was not a good year. What what makes this so concerning right now, these numbers?

[00:00:30]Well, I think there's a couple of things. So, first of all, these are insolvency volumes. It's the highest since 2009. Now, since 2009, we have seen a lot of population growth within Canada, but if we look at the rate, so per capita level, it's actually the highest since 2019. Now, that's significant because in 2019, we were in a period of increasing financial difficulty and stress. And in fact, the only reason we seemed to come out of that really was actually the pandemic, where consumers pulled back on a lot of their their credit usage. So, it is a concern because obviously insolvencies are a great indicator of extreme financial stress across the Canadian ecosystem.

[00:01:07]And did we see that with other prior times that we was there a pullback? Is that something we could be expecting right now?

[00:01:15]Or this time around, not right now, but this time around?

[00:01:18]Yeah, and a great question. So, I mean, you know, like I said, this 2019 really was a bit of a peak. And so, we are experiencing a similar peak right now. The numbers are still rising.

[00:01:28]They've risen for the last couple of quarters. And so, we do expect them to continue to rise, probably, you know, later into this year. Now, insolvency numbers do tend to be a little bit of a lag measure in the sense of, you know, a consumer has to reach quite an extreme situation to become insolvent. So, you know, I think what's really important is we look at what's also happening right now in Canada with some of the early stages of mispayments on credit. And yeah, they are starting to stabilize a a bit. So, there is some positive information as well as those insolvency numbers. Have things changed on the help, I guess, for people who are approaching that that that decision of deciding if they go face insolvency or not? Have we Have banks tried to work with them to try and avoid it or are things like that?

[00:02:14]Yeah, absolutely. You know, I think when a consumer is approaching that kind of financial stress levels, lenders are always willing to have conversations and you know, try and help them through that situation. There are also lots and lots of course free organizations out there that can certainly support consumers through that kind of difficult difficult period.

[00:02:33]Uh and and just looking at the numbers, total consumer debt 2.66 trillion, up 3.8%.

[00:02:40]That's concerning because I mean our population hasn't grow grown and that So, that means people are building up more debt, aren't they?

[00:02:47]Well, yes and no. So, when we look at those numbers, a big chunk of that is actually mortgage debt. So, around three-quarters of that headline number tends to be mortgages and that is up year on year. And our non-mortgage debt has risen as well, but what is a little bit of good news is that in Q1, we actually saw a pullback in terms of non-mortgage debt. That fell around $487 million at the end of the first quarter. Now, that's significant because seasonally, we wouldn't expect to see that amount of pullback or drop in non-mortgage balance. So, what that tells us is consumers perhaps are being a little bit more prudent. They may be pulling a little bit back in terms of some of their spending, some of their credit usage, which is good news on the credit side, potentially less good news if that continues for the business and small business side because obviously, you know, we need consumers to be spending to help the economy. So, it is is positive for the credit side, but maybe not so much for the wider economy. Yeah, and there and there's the rub, isn't it?

[00:03:43]And with mortgages, how are they looking? I mean, we've seen mortgage rates surge over the last little while. They flattened a little bit, but still that must uh be putting pressure on.

[00:03:54]Yeah, I mean, when we look at mortgages across Canada, I mean, average mortgage amounts, they have kind of dropped a little bit because some of those house prices have fallen. What is a concern though is still we are seeing miss payment levels on mortgages rising both from a volume standpoint point and also from the overall balance of those mortgages across the country. Now, that is really concentrated in some of those hot housing markets of Ontario and British Columbia, where we did see, you know, mortgage levels really rise, in particular during the period of the pandemic. Um and, you know, post some of the renewals when they're kind of coming off those low interest rates and going on to higher interest rates, that is unfortunately causing financial stress.

[00:04:35]Now, if you are in some of the other provinces like Quebec, Saskatchewan, actually we're seeing mortgage miss payment levels starting to drop now, but it is still, you know, a bit of a problem in those uh hot housing market areas. And uh and how much [clears throat] is the delinquency gone up? What's the what's the rate at right now?

[00:04:52]So, when we look at the balances, uh it's around uh 32% year-on-year. In Ontario, that is 52% and in BC, 36%. So, it's those two provinces that are really pushing that up compared to 12 months ago. And is that a concern I mean, the fact it's up uh it's jumped at 32%?

[00:05:11]Uh is that a is that a big jump or something that's manageable or is it concerning?

[00:05:17]You know, I I think when you look at it, overall, the percentage level is still quite small. So, when we think about mortgages, they do tend to be the last type of credit product that a consumer will miss a payment on. So, we're still talking quite low percentages, you know, kind of 0.2%, 0.26% uh levels. So, that side of it, it's small, but it is a wider indication of general financial stress within those regions in particular. Now, again, it's not just about the mortgages, of course, we have affordability challenges across Canada.

[00:05:49]And again, in some of those hot housing markets, that combination just makes it a little bit too much for for many consumers to manage. In which way is it do we have a trend on it at all, or is it still very uncertain, very volatile?

[00:06:01]Yeah, so I mean, within Ontario and BC in particular, we are still seeing those numbers rising currently. You know, when we think about the renewals and kind of the the number of renewals that we had in 2025, there are still many that are renewing this year as well. So, we do expect to see those mispayments on mortgages continuing through 2026, particularly in those regions. I think what's really important now is what's happening in terms of on the global stage right now. You know, if you think about things like the inflation levels and kind of things like gas prices, that can have a serious impact in terms of not just homeowners, but also non-homeowners, particularly those maybe with lower incomes. You know, when inflation takes hold, that can really tip the balance for a lot of consumers with those lower incomes. So, I think what's going to be really important as well for the rest of the year is what happens to those gas prices and the impact that can have. All right, we have to wrap it up there, but Rebecca, thank you very much for joining us.

[00:06:55]Thank you so much. Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada.