Credit Payment Delinquencies Rise Among Canadian Consumers

Equifax Canada’s Q1 2025 report shows 1.4 million Canadian borrowers (representing 1 in 22 credit users) missed at least one credit payment during the first quarter. This occurred despite a $107 reduction in average monthly credit card spending per cardholder.

The data reveals distinct trends among borrower segments. Consumers without mortgages saw their delinquency rates increase by 8.9% year-over-year, compared to a 6.5% rise among mortgage holders. Average non-mortgage debt levels climbed to $21,859 per borrower, with significant activity in auto financing as consumers anticipated potential tariff-related price increases. Younger borrowers faced particular challenges, with credit card delinquencies in this demographic rising 21.7% year-over-year to reach 5.38%.

Canada’s total consumer debt reached $2.55 trillion in Q1 2025, marking a 4% annual increase though showing a $6 billion decrease from Q4 2024 levels. The mortgage market continues to experience the effects of the “Great Renewal” period, as homeowners who secured low rates during the pandemic now face renewals at higher rates. Ontario emerged as an area of particular concern, with mortgages delinquent by 90+ days increasing to 0.24% of all mortgages in the province.

Rebecca Oakes, Vice President of Analytics at Equifax Canada, noted the connection between payment difficulties and broader economic conditions: “Sustaining regular payments requires stable employment and income. When economic uncertainty increases while living costs rise, more consumers inevitably struggle to meet their financial obligations.”

The report suggests these credit stress patterns may have wider implications, as reduced discretionary spending could eventually affect business performance and employment levels across various sectors.