Canadian Consumer Debt Reaches $2.6 Trillion, Driven by Non-Mortgage Defaults
Canadians are increasingly relying on credit, with total consumer debt climbing to $2.6 trillion in the third quarter of 2025, according to a recent report by TransUnion Canada. This represents a rise of over 4% compared to the same period in the previous year, signaling a growing trend of household indebtedness.
While mortgage debt remains a critically important portion of overall household liabilities, the transunion report highlights a concerning increase in payment defaults across other credit products, including credit cards and lines of credit. This trend is especially pronounced among younger members of Generation Z.
“We’re seeing a shift in where the stress is occurring,” explains Michel-Olivier Marcoux,President at ASF Wealth Management. “While mortgage holders have generally been able to manage their payments, younger Canadians are facing greater challenges with non-mortgage debt.”
Several factors contribute to this rising debt and increased default rates. Persistent inflation, coupled with rising interest rates, are squeezing household budgets, leaving less disposable income for debt repayment. Additionally, changing spending habits and increased access to credit might potentially be contributing to the accumulation of debt, particularly among younger generations.
Experts recommend Canadians prioritize debt management strategies, including budgeting, reducing discretionary spending, and exploring options for debt consolidation or professional financial advice. Monitoring credit reports regularly and understanding credit utilization ratios are also crucial steps in maintaining financial health.