Canadian consumer debt hits record $2.64 trillion as mortgage stress mounts
“Provincial results suggest the recent rise in mortgage delinquencies is driven less by broad borrower distress and more by localized weakness in Canada’s most expensive markets, particularly Ontario and British Columbia.”
Beyond delinquency, the consumer insolvency rate climbed to 1.10% in Q2 2026, up from 0.94% in Q2 2024, the highest level recorded in the past two years.
The increase was driven predominantly by non-mortgage holders: insolvency rates among Canadians without a mortgage have edged above pre-pandemic levels, while homeowners remain comparatively resilient.
Provinces under pressure
| Province | Account-level change | Balance-level change | Status |
|---|---|---|---|
| Ontario | ▲ +6 bps (to 0.32%) | ▲ +10 bps (to 0.41%) | Highest nationally |
| British Columbia | ▲ +4 bps (to 0.27%) | ▲ +7 bps (to 0.28%) | Elevated |
| Prince Edward Island | ▲ +5 bps | — | Watching |
Ontario’s balance-level delinquency rose 10 bps year-over-year — the largest increase of any province. The sharper rise at the balance level, compared to the account level, indicates financial stress is concentrated among borrowers carrying the largest mortgages in Canada’s most expensive markets.
Provinces holding steady
| Province / Region | Account-level change | Balance-level change | Status |
|---|---|---|---|
| Quebec | Unchanged (0.22%) | ▼ −1 bps (to 0.17%) | Stable |
| Alberta | Stable or improving year-over-year | Stable | |
| Saskatchewan | Stable or improving year-over-year | Stable | |
| Manitoba | Stable or improving year-over-year | Stable | |
| Atlantic provinces | Stable or improving year-over-year | Stable | |
Prairie and Atlantic provinces showed no meaningful deterioration in Q2 2026. Quebec’s balance-level delinquency rate declined modestly.
Consumer proposals accounted for approximately 80% of all insolvency filings in the quarter, consistent with a trend toward structured debt restructuring rather than outright bankruptcy.
“The dominance of consumer proposals is somewhat reassuring, as it suggests more consumers are seeking debt restructuring rather than defaulting outright. The key question for the second half of 2026 is whether economic normalisation can ease that pressure,” Fabian said.
