Canadian insolvency volumes in Q1 have increased to levels not seen since 2009, up 18.8% year-over-year, indicating that many consumers may have reached a financial inflection point, said Equifax Canada on Tuesday.
While total consumer debt climbed to $2.66 trillion, up 3.8% year-over-year, non-mortgage debt fell by more than $487 million in Q1, writes Equifax in its Market Pulse Quarterly Consumer Credit Trends and Insights. Notably, non-mortgage debt saw its first decline in several quarters, as consumers seemingly practiced post-holiday financial restraint.
Despite these signs of individual financial discipline, systemic risks seem to persist, stated Equifax.
The number of Canadians missing at least one credit payment in Q1 remained stable at 1.5 million, or one in 21 consumers, which indicated a sign of improvement for many groups of consumers. The percentage of active card users paying less than 25% of their balance each month fell by more than 2%, while the percentage paying their balances in full increased. Additionally, the percentage of minimum payers also saw a drop, with the biggest reduction seen with consumers aged 26-35 years old.
Q1 saw insolvency rates hit a 17-year high, partly due to escalating financial strain on mortgage holders, added Equifax. Homeowner insolvency volumes jumped by more than 11% over Q4 2025, with over 90% of these individuals choosing consumer proposals over bankruptcy. Total insolvency numbers remained higher among non-mortgage holders, but their quarterly growth was more modest, rising by 4.7% compared with Q4 2025.
While insolvency volumes reached their highest level since 2009, the overall insolvency rate rose to levels last seen in 2019 - the variance can likely be attributed to population growth, it pointed out. The severity of these insolvencies has worsened, however, with the average non-mortgage debt in these filings increasing to $43,300 in Q1 2026, up from $40,200 two years ago.
This trend is even more pronounced for mortgage holders, whose average non-mortgage debt reached $82,400, up by 19.0% compared with two years ago. This rising trend is also reflected in the average balances of delinquent accounts.
For mortgage holders who have missed a payment, their average delinquent non-mortgage balances reached $54,000 in Q1, a 4.6% increase compared to 12 months ago. The average balance of their delinquent mortgages also climbed by 13.2% to $355,500.