The number of Canadians filing for insolvency has surged to levels not witnessed since the Great Recession, indicating that many consumers have reached a critical financial tipping point, according to a new report from Equifax Canada.
Sharp Increase in Insolvency Volumes
Insolvency volumes jumped 18.8% in the first quarter of 2026 compared to the same period last year, reaching the highest level since 2009. Homeowner insolvency volumes rose by more than 11%, while the number of Canadians without a mortgage filing for insolvency also increased, though at a slower pace of 4.7%.
Worsening Severity of Insolvencies
The severity of insolvencies has also deteriorated. The average non-mortgage debt in filings climbed to $43,300, up from $40,200 two years ago. For homeowners, the average non-mortgage debt surged to $82,400, a 19% increase.
Rebecca Oakes, vice president of advanced analytics at Equifax Canada, noted that while the mortgage renewal wave is expected to slow toward the end of 2026, the transition to significantly higher interest rates continues to fuel financial impact and payment pressure. She emphasized the importance of ongoing debt monitoring for Canadians.
Regional Disparities in Mortgage Delinquencies
Severe financial strain is particularly evident in Canada's higher-priced housing markets. Mortgage delinquencies soared 52% in Ontario and 36% in British Columbia during the quarter.
These findings align with other surveys indicating mounting financial pressures. The Harris & Partners Financial Resilience Index revealed that nearly 60% of respondents said their income did not cover basic expenses such as rent, food, and bills, while 83% reported cutting back on essentials like heating and groceries.
Insolvency trustee and CEO Joshua Harris observed that more people are being forced to make difficult choices just to stay on top of monthly expenses. When households rely on savings or credit to manage basic costs, it can quickly lead to long-term financial strain.
Positive Signs in Debt Management
Despite the grim statistics, there are some positive indicators. Total consumer debt rose 3.8% to $2.66 trillion in the first quarter, but non-mortgage debt declined for the first time in several quarters. Oakes attributed this to reduced holiday spending at the close of 2025, which led to lower seasonal balance increases on credit cards. This discipline allowed many Canadians to pay down balances during the first quarter, representing a critical shift in how consumers are navigating the current macroeconomic climate.
