Canada’s debt crisis deepens: Money.ca study reveals households are at a financial breaking point as delinquencies spike

Google search reveals real-time anxiety

When people worry, they Google, and Canadians are searching their way through this financial crisis.

Searches for "budget planner" shot up 152.86% over the past year, showing many are trying to regain control before things spiral. But at the same time, interest in “payday loans” rose 27.6%, hinting that others are reaching for expensive lifelines just to cover everyday costs.

Read More: Find the best budget planner to help manage your money.

And it's not just about planning ahead. People are bracing for the worst:

• Searches for “personal bankruptcy” rose 4%
• “Garnishment” (a legal process to seize wages) climbed 6%
• “Consumer proposal” searches were up 3%, as Canadians look to negotiate their way out of debt
• “Debt consolidation” saw an 8% bump, reflecting a desire for simpler repayment plans

This surge in search activity paints a stark picture of a nation in financial distress, with Canadians taking both proactive and desperate measures to manage their debt. The growing interest in bankruptcy, garnishment and debt restructuring options reveals a widespread struggle to keep up and underscores the urgent need for accessible financial solutions.

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Debt stress hits harder in some provinces

Canada’s financial picture is anything but uniform. In some places, residents are managing, and in others, the strain is overwhelming.

• Quebec leads the country in delinquency rate growth: +24.16%, even though average debt only rose a modest 2.68%
• Ontario isn’t far behind, with delinquencies up 23.78%, driven largely by expensive urban living in cities like Toronto
• Newfoundland, surprisingly, shows the opposite trend: despite a 7.78% jump in debt — the highest in Canada — its delinquency rate actually fell 0.46%, suggesting local resilience
• Smaller provinces like PEI saw a 5.47% increase in debt and a manageable 5.94% rise in delinquencies — still concerning, but far from crisis territory

Big city, big pressure: Urban centres under siege

If you live in a major Canadian city, you’re likely feeling the pinch more than most.

• Montreal saw a staggering 27.06% spike in delinquencies — the highest of any city — despite having one of the lowest average debt levels at $16,894
• Toronto’s delinquency rate climbed 24.16%, closely tied to its unaffordable housing market and high living expenses
• In Vancouver, where average debt is a hefty $23,002, delinquencies rose 19%
• By contrast, places like St. John’s (+0.73%) and Halifax (+11.6%) are showing much more stability, a reminder that smaller cities may offer a softer landing in turbulent financial times

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Different generations, different financial struggles

No age group is immune, but the reason why each age cohort is struggling does vary.

• Young adults (18 to 25) are getting hit hard early, with delinquencies up 17.02% on relatively small debts (average: $8,267), primarily due to the difficult combination of low income and limited employment experience
• Pre-retirees (56 to 65) are in a crunch with debt climbing 6.28%, and delinquencies following suit, rising 16.88%. Retirement planning is tough when you're still paying off large debts
• Even retirees (65+), who carry the least debt overall ($14,575), saw delinquencies rise 8.12%, a result of rising living and healthcare costs outpacing fixed incomes

What Canadians can do right now

Here are a few action steps that could help turn the tide, or at least slow it down:

1. Start with a budget (and stick to it): Searches for “budget planner” are booming for a reason. Free online tools or budget apps can help you get a handle on where your money’s going and identify areas to cut back.

2. Look into consolidation or consumer proposals: If your debt is scattered or unmanageable, consolidating it into one lower-interest payment using a consolidation loan or negotiating a consumer proposal might bring relief.

3. Avoid payday loans: They’re tempting for quick cash, but the long-term costs can be brutal. Try talking to your bank or local credit union about lower-cost alternatives.

4. Build your financial literacy: If you're under 30, learning the basics now can save you years of stress later. Free resources, workshops and even YouTube can be powerful tools. Even those over 30 can benefit from learning basic or more complex money management skills.

5. Push for policy support: High-cost cities and vulnerable provinces need localized solutions, from affordable housing strategies to expanded access to debt support programs.

The pressure is real but so are the options

This isn’t just a blip on the radar. The findings of the Money.ca study reveal a nationwide warning sign that Canadians, across all regions and age groups, are struggling to stay financially afloat. But there are tools, resources and policy solutions that can help.

Whether you're drowning in bills or just feeling the squeeze, now’s the time to act, before a missed payment turns into a bigger crisis.

Read the full report at Money.ca/research/canada-debt-crisis