Posthaste: Never mind the mortgage cliff, this is the debt Canadians are really struggling with

An Equifax Canada report released this week revealed that approximately 1.4 million Canadians missed a credit payment in the second quarter. While this number is slightly lower than the first quarter, it remains higher than the previous year by 118,000 individuals. Interestingly, the report highlighted that the number of individuals missing payments who do not have a mortgage is almost double that of those who do.

Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada, noted that there is a growing disparity between mortgage and non-mortgage consumers, with younger Canadians facing significant financial strain due to factors such as a slower job market and rising costs. The delinquency rate among Canadians under 36 has increased by almost 20% compared to the previous year, with an average non-mortgage debt of $14,304.

Furthermore, the report indicated that spending levels have risen among individuals without mortgages, while homeowners have reduced their credit card expenses. Credit card balances reached a record $113.3 billion in June, with total non-mortgage credit liabilities amounting to $793 billion, an increase of $29 billion from the previous year.

The Credit Counselling Society noted that Canadians seeking assistance are carrying larger debt loads, with the average unsecured debt load rising to $34,400 in June, a 14% increase from the previous year. Oakes expressed concern over the financial challenges facing younger consumers, attributing them to rising costs, job insecurity, and limited access to affordable credit.

Regions such as Ontario, particularly the Greater Toronto Area and Hamilton, experienced a significant increase in missed payments, reflecting the high cost of living and exposure to industries impacted by U.S. tariffs. Delinquency rates also rose in Alberta, with non-mortgage holders showing more financial stress than their mortgage-holding counterparts.

Looking ahead, Equifax anticipates that credit performance will remain a critical issue for young consumers throughout the latter half of the year. The report underscores the importance of addressing financial challenges and providing support to individuals facing increasing debt burdens.