More Canadians owe more money than ever before and use debt to survive, with millions of people having “no margin for error” if a financial crisis strikes, a new document suggests.
“Many Canadians are under financial strain … over half of Canadians (53%) report that they struggle to keep up with financial commitments,” the Financial Consumer Agency of Canada (FCAC) said in a recently released memo, which was first covered by Blacklock’s Reporter.
FCAC acquired the findings from Monthly Financial Well-being Monitor questionnaires that it had commissioned. That data showed household debt trends had worsened since the pandemic.
The survey found that one-quarter of Canadians said they “spend more than they earn,” 50 percent had used savings over the past year to cope with expenses, and 33 percent borrowed to cover regular expenses, according to the April 13 memo.
Figures from 2025 showed that 40 percent of Canadians had seen their debt increase since 2021, up four percentage points. Meanwhile, 26 percent were spending more than they earned, also up four points, while 33 percent were borrowing to cover regular expenses, an increase of two points.
Further, 50 percent of Canadians reported using their savings due to economic conditions, up 10 percentage points. Nearly half (48 percent) had no emergency savings, while 53 percent struggled to meet their financial commitments—an increase of seven percentage points.
“Having more types of debt, or having increasing amounts of debt, is strongly associated with lower financial well-being,” the memo said.
In 2025, 65 percent of all Canadians had non-mortgage debt, including 39 percent with credit card balances, 30 percent with personal loans or lines of credit, 26 percent with vehicle loans, 14 percent with a home equity line of credit, and 10 percent with student loans, the document noted.
Meanwhile, bankruptcy trustees told the House of Commons’ finance committee on April 23 that household debt nationwide is $3.2 trillion, with more than $2 trillion in mortgages.
Grant Bazian, president of MNP LLP in Calgary, testified that more Canadians are borrowing to cover essential expenses and “to survive,” with housing costs being the largest driver of household debt.
“Many Canadians have no margin for error, and even a small shock—a job loss, an illness or a rate increase—can trigger a crisis,” he said. “Inflation has slowed, but the cumulative rise in prices has permanently stretched budgets, especially when wages have not kept pace.”
Bazian added that more Canadians are turning to high-interest credit that can become a long-term burden. By the time they contact an insolvency trustee, they often have maxed-out credit cards, taken out high-interest loans, used payday-style products or refinanced their homes—sometimes multiple times.
MNP has compiled seven years’ worth of data through its Consumer Debt Index survey that has identified recurring and concerning trends, Bazian said.
These trends include declining confidence after repeated economic shocks, increasing reliance on credit for essentials, a shrinking financial cushion with many within $200 of insolvency each month, growing emotional strain, and seasonal improvements that no longer lift sentiments.
“Canadians are adapting to chronic strain rather than recovering from it,” Bazian said, adding a future “tipping point” could negatively affect people’s cash flows.
Sheri Aberback, senior vice-president of MNP LLP, told the committee that four recommendations to address this issue include increasing public awareness of federally regulated debt relief options, strengthening consumer protections around high-interest credit, addressing the housing-debt connection, and supporting practical financial education.
