Canada’s Credit Divide: Balances Soar In East, Defaults Rise In Ontario

Canadian household debt is throwing out more concerning data points. Equifax data shows non-mortgage credit grew in Q2 2026—both balances and delinquencies. Ontario is leading the erosion, with missed payments rising at double the average. Meanwhile, New Brunswick is leading for credit growth, but it showed limited payment stress. There’s a good reason for this split. 

Canadian non-mortgage household debt climbed 2.1% (+$14.6 billion) to $712.2 billion in Q2 2026, up 4.6% (+$32.6 billion) from last year. A busy quarter, considering almost half of the debt added within the past year was just Q2. The agency estimates the average consumer owed $22,699 in the quarter, 2.6% higher than last year. 

Debt is growing, but so are signs of households cracking under the astronomical loads. The non-mortgage delinquency rate came in at 1.76% in Q2, 5 basis points (+3.1%) higher than last year. Equifax notes a quarterly decline occurred, but suggested it’s a seasonal issue and not a trend. 

“Between March and June, we typically see non-mortgage debt levels rising and missed payments falling,” explains Rebecca Oakes, VP of Advanced Analytics at Equifax.

The general takeaway: households are racking up debt and having trouble repaying it. A provincial breakdown shows that both trends aren’t appearing at the same time, but one may follow the other.

Consumer Credit Growth Is Surging In Eastern Canada

Canadian non-mortgage debt: Annual growth rate of consumer debt by region in Q2 2026.  

New Brunswick households racked up non-mortgage debt at the fastest rate. The average consumer in the province owed $23,509 in Q2 2026, 7.6% more than last year. It was followed by annual growth in Quebec (+3.3%), Nova Scotia (+3.2%), PEI (+2.9%), and B.C. (+2.9%). 

The most heavily indebted provinces are showing weaker average annual growth. The lowest rate was in Saskatchewan (+1.2%), followed by 1.3% in Alberta, where the average consumer owed $25,082 in Q2. Also below the national average is Newfoundland (+1.4%), the most indebted province. Ontario (+2.3%) managed to come in under the average, which isn’t a surprise with the group of provinces. The common theme is that these provinces have the most indebted average consumer. These borrowers aren’t just tapped out, but it’s also just harder to grow large numbers. 

Source: Equifax; Better Dwelling. 

Provinces with the fastest-growing debt are showing the least payment stress. The 90-day delinquency rate for New Brunswick fell 17 bps (-9.5%) to 1.6% in Q2 2026. In Quebec, it slipped 1 bp (-1.0%) to 1.13%. In B.C., the rate climbed 5 bps (+3.3%) to 1.6%, but it’s still below the national average.  

Ontario stands boldly on the other side of this trend, with its delinquency rate climbing 15 bps (+7.9%) to 1.9% in Q2 2026. That isn’t just higher than the national rate, but it’s eroding close to twice as fast as the national trend. Post-housing boom, the province is also leading in both insolvencies and mortgage arrears. This didn’t go unnoticed by Oakes. 

“Ontario continues to stand out though, with some mortgage holders struggling to keep up with other credit obligations,” she notes.

Slower credit growth and higher delinquency rates (and vice versa) seem odd, but it makes sense. High credit growth is seen in provinces with lower debt levels in dollars. The weakest growth is in regions with the most indebted consumers and the highest delinquency rates. It’s an expected part of business, credit, and housing cycles. 

There’s evidence that shows post-housing booms, households flock to consumer credit. After buying a home, savings tend to be exhausted. As a result, these borrowers tend to use credit to “smooth” consumption. Credit experts have called this trend in Canada “distress borrowing.” To be blunt, this means households that stretched to buy a home are now tapping credit to make ends meet. It’s not unique to Canada, but the more debt a household has, the more likely they are to miss payments.

Non-mortgage credit is rising fastest in provinces where home prices are near highs. This suggests Ontario may not be worse off per se, but simply leading the trend. It’s the only province that saw a serious home price correction and that happened early. That would also mean the other provinces may be late to the party, not doing much better. 

Only one province doesn’t seem to fit the MO—Alberta. It has the second-highest average consumer debt and the highest delinquency rate at 2.5%. However, its delinquency rate fell 0.6% over the past year. The combination almost makes Alberta seem like it’s on a different economic cycle from the ROC.