Insolvency volumes hit highest since 2009: Equifax

A new report from Equifax Canada says insolvency volumes have risen to the highest level since 2009 amid escalating financial strain on homeowners.

The firm’s first-quarter market pulse report on consumer credit trends says systemic risks persist even while Canadians are staying financially disciplined to cope with economic challenges.

Insolvency volumes for the quarter were up 18.8% year over year, indicating that many consumers “may have reached a financial inflection point,” it said.

“While the mortgage renewal wave is expected to slow towards the end of 2026, the transition to significantly higher interest rates continues to fuel financial impact and payment pressure,” said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, in a news release.

“Consequently, ongoing monitoring of debts remains essential for Canadians.”

Homeowner insolvency volumes jumped more than 11% from the fourth quarter of last year, with more than 90% of those individuals choosing consumer proposals over bankruptcy, the report said.

Total insolvency figures remained higher among non-homeowners, but their quarterly growth was more modest, rising 4.7% compared with the final quarter of 2025.

The report also said the severity of insolvencies has worsened, with the average non-mortgage debt reaching $43,300 in the first quarter, up from $40,200 two years ago. Among homeowners, average non-mortgage debt reached $82,400, up 19% compared with two years ago.

For homeowners who have missed a payment, their average delinquent non-mortgage balances reached $54,000 in the quarter, a 4.6% increase compared with a year ago. The average balance of their delinquent mortgages also climbed 13.2% to $355,500.

The report said high-priced housing markets are seeing more severe financial strain, with mortgage delinquencies jumping 52% in Ontario and 36% in B.C. year over year.

During the quarter, total consumer debt climbed to $2.66 trillion, up 3.8% year over year, while non-mortgage debt fell by more than $487 million. The firm said non-mortgage debt saw its first decline in several quarters, as consumers seemingly showed post-holiday financial restraint.

“The reduction in holiday spending at the close of 2025 translated into lower seasonal balance increases on credit cards,” said Oakes.

“This discipline enabled many Canadians to pay down balances during the first quarter, representing a critical shift in how consumers are navigating the current macroeconomic climate.”

The quarter saw a decline in demand across most credit categories, as new credit card originations hit a four-year low, with growth limited exclusively to the super-prime and sub- or near-prime segments.

The number of Canadians missing at least one credit payment remained stable at 1.5 million, or roughly one-in-21 consumers. The percentage of active card users paying less than one-quarter of their balance each month fell by more than 2%, while the percentage paying their balances in full increased.