Toronto, ON – August 22, 2025 – A new Equifax Canada report reveals that approximately 1.4 million Canadians missed at least one credit payment in the second quarter of 2025, highlighting ongoing financial strain despite a slight dip in the overall delinquency rate. This figure marks a year-over-year increase of 118,000 missed payments compared to Q2 2024, though it represents a marginal improvement from Q1 2025. The report underscores a growing financial divide, particularly between homeowners and non-homeowners, with younger consumers and non-mortgage holders facing disproportionate challenges amid rising costs and economic uncertainty.
Key Findings from the Equifax Report
The Equifax Canada Q2 2025 Consumer Credit Report paints a complex picture of Canadian financial health. Total consumer debt rose 3.1% year-over-year to $2.58 trillion, with the average non-mortgage debt per consumer climbing to $22,147. Notably, younger Canadians under 36, including Millennials and Gen Z, are bearing the brunt of the affordability crisis. Their average non-mortgage debt increased by 2% to $14,304, and their 90-plus-day delinquency rate for non-mortgage balances surged 19.7% to 2.35% compared to Q2 2024.
Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada, described the leveling off of delinquency rates as “a bit of good news,” noting, “We’re starting to finally see that stabilize a little bit.” However, she cautioned that “the less good news is that we’re still seeing this financial gap widening for some groups of consumers,” particularly between homeowners and non-homeowners. The report found that one in 19 Canadians without a mortgage missed a credit payment, compared to one in 37 homeowners, highlighting a stark disparity.
Regional and Sector-Specific Pressures
Ontario, particularly the Greater Toronto Area, emerged as a hotspot for financial distress, with a 90-plus-day delinquency rate of 1.75%, 15.2 basis points above the national average. This is partly attributed to economic challenges in tariff-impacted sectors like auto and steel. However, Oakes noted that the financial gap between homeowners and non-homeowners in Ontario peaked in 2024 and has begun to narrow slightly.
The report also points to broader economic factors driving missed payments, including high unemployment, rising living costs, and trade disruptions. These pressures are particularly acute for younger consumers, who face employment uncertainty and limited access to affordable credit. “The affordability crisis seems to be hitting younger consumers the hardest,” Oakes said. “Between rising costs, employment uncertainty, and limited access to affordable credit, many are struggling just to stay afloat.”
Comparison with TransUnion Findings
A complementary report from TransUnion Canada, released shortly before Equifax’s, reported total consumer debt at $2.52 trillion in Q2 2025, up 4.4% year-over-year. Matthew Fabian, Director of Financial Services Research at TransUnion Canada, noted that “subprime consumers are more likely to feel the impact of higher costs of living and may choose to take on additional debt, such as credit card balances, to help cover the costs of goods and services.” In contrast, higher-risk-tier borrowers have seen card balance growth below inflation rates, suggesting less reliance on credit cards to maintain purchasing power.
Implications for Consumers and Lenders
The rise in missed payments, particularly among younger and non-homeowner demographics, signals ongoing financial stress that could have ripple effects. For consumers, missed payments can damage credit scores, limiting access to future credit and increasing borrowing costs. For lenders, the uptick in delinquencies—especially the 19.7% jump in 90-plus-day non-mortgage delinquencies among younger borrowers—may prompt tighter lending standards or higher interest rates to mitigate risk.
The slight decline in delinquency rates from Q1 to Q2 offers some optimism, suggesting that some Canadians are adjusting to economic pressures, possibly by cutting discretionary spending. However, the persistent year-over-year increase in missed payments and rising debt levels indicate that affordability challenges remain entrenched, particularly for vulnerable groups.
Broader Economic Context
The Equifax report aligns with broader economic trends, including a high volume of mortgage renewals at higher rates, which Oakes referred to as “the great renewal.” Many homeowners who secured low rates during the early COVID-19 pandemic are now facing increased payments, contributing to financial strain that often manifests first in missed credit card payments. Additionally, Canada’s unemployment rate, while stable at 6.4% in July 2025, masks regional and demographic disparities that exacerbate financial difficulties for certain groups.
Looking Ahead
As Canada navigates a complex economic landscape, the Equifax report underscores the need for targeted support for struggling consumers, particularly younger Canadians and those without mortgages. Policymakers and lenders may need to explore options like debt relief programs, financial literacy initiatives, or more flexible credit terms to address the growing divide. For consumers, managing debt through budgeting, prioritizing high-interest payments, and seeking professional advice could help mitigate the impact of rising costs.
The next Equifax report, expected in November 2025, will provide further insight into whether delinquency rates continue to stabilize or if economic pressures drive further increases in missed payments. For now, the 1.4 million missed payments in Q2 serve as a stark reminder of the affordability crisis gripping many Canadians.
For more information on managing credit, visit equifax.ca or transunion.ca.