TORONTO, ON – Canadians are increasingly anxious about their financial futures, facing a stark reality of mounting debt and eroding purchasing power. A recent opinion piece by John Turley-Ewart in The Globe and Mail paints a somber picture, suggesting that the nation is heading into a decade defined by “thrift and lower living standards.”
The core of Canada’s financial predicament lies in its staggering household debt. Turley-Ewart highlights that Canada’s debt-to-household disposable income ratio has been “nearly 200 per cent for years now,” a figure that places it “in first place among G7 countries.” Citing Statistics Canada, he notes Canada’s ratio is 185 percent, significantly higher than the G7 average of 125 percent. Collectively, Canadian households owe an estimated $3-trillion, with nearly three-quarters of this being mortgage debt.
The housing crisis is not just an affordability issue; it’s actively “undercutting middle-class living standards.” Many Canadians are struggling simply to “make the next mortgage payment without having to borrow it.”
This bleak outlook was echoed by Peter Routledge, head of the Office of the Superintendent of Financial Institutions (OSFI), who stated earlier this year that “2025 and 2026 will be challenging years.” Routledge emphasized the impending mortgage renewal wave: “As of September 2024, 65 per cent or 3.8 million mortgages are set to renew by the end of 2026. Of these, approximately 62 per cent (or 2.4 million) have yet to experience increased payments.” These higher mortgage payments, combined with elevated living costs (where “what cost $100 in 2020 now costs $120” according to the Bank of Canada’s inflation calculator), are leaving less money for savings and retirement.
StatsCan: “household borrowing slows as debt continues to outpace income growth.”
Evidence of this financial strain is clear in recent economic data. Statistics Canada’s first-quarter 2025 national balance sheet and financial flow accounts report revealed that household savings and investment rates are “down for a second consecutive quarter” because “household spending (+1%) outpaced disposable income gains (+0.8%).” While the net worth of Canadian households saw a slight increase of 0.8 percent in the first quarter of 2025 (down from 1 percent in the last quarter of 2024), this growth is skewed. The wealthiest 20 percent of households hold a disproportionate amount of assets, owning “68.1 per cent of all financial assets and 51.2 per cent of real estate.” Even for this segment, wealth accumulation is slowing.
Canadians are also “starting to hit the credit wall,” with declines in both mortgage and non-mortgage demand in the first quarter of this year. Statistics Canada attributes this to “household borrowing slows as debt continues to outpace income growth.” While mortgage interest payments are up due to renewals at higher rates, a slight silver lining exists in decreases to the Bank of Canada’s policy interest rate, which has helped reduce interest payments on non-mortgage loans, including home equity lines of credit.
The cumulative effect of these factors is a realization for many Canadians that a significant portion of their disposable income for the foreseeable future will be allocated to “paying down household debt.” This reality is undoubtedly contributing to the “anxious, fearful and sad” sentiments about finances reported in a Healthcare of Ontario Pension Plan survey. As Turley-Ewart concludes, the ability to retire comfortably is becoming “one more item on a growing list of aspirations many Canadians cannot afford.”
