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Does it feel like everything’s expensive right now? Well, you’re not wrong. As the cost of living in Canada continues to rise, more Canadians are being forced to make difficult decisions, like whether to buy groceries or pay the electric bill.
Here we take a look at the rising cost of living in Canada, the state of debt, and what options are available for debt relief.
Many Canadians are Struggling Financially
Nearly half (45%) of Canadians report that rising prices are impacting their ability to meet daily expenses, according to recent findings from the Government of Canada.
While increased costs can affect all Canadians, some groups are more financially vulnerable. Low-income individuals and families report more financial struggle than those in higher income brackets. Young adults are also more likely to report financial struggles and stress versus their older counterparts. Similarly, households with children report more financial concern than single or multi-person households with no kids.
Another group that struggles with affordability is disabled Canadians. People with disabilities are more likely to live in poverty and often rely on fixed income budgets, leaving little flexibility to accommodate rising prices.
How Much Debt Does The Average Canadian Have?
Average Canadian household debt sits at $22,321, excluding mortgage debt, according to Equifax Canada. This is an increase of $511 from last year.
The highest average debts are found in Newfoundland ($25,385), Alberta ($24,790), and Prince Edward Island ($24,365). The cities with the highest household debt include Fort McMurray ($37,830), Vancouver ($24,808), and Calgary ($24,451).
The number of Canadians who’ve missed their debt payments for more than 90 days is also on the rise. Year-over-year delinquency rates rose across all ages and provinces and major cities.
Why is Everything so Expensive?
From groceries to housing, and the high cost of borrowing, Canadians are feeling the financial pinch. Here’s a look at some of the factors driving rising costs.
- Grocery inflation. Food affordability remains one of the top concerns, and for good reason. One quarter of Canadian households are considered food insecure, according to Canada’s Food Price Report. Nearly 2.2 million people used food banks on a monthly basis in 2025, and food prices are nearly 27% higher than they were five years ago.3 Trade disputes, tariffs, and supply chain disruptions have all contributed to rising food prices.
- Rising rent. The rising costs of housing and rent have nearly half (45%) of Canadians reporting concerns over the affordability of housing. Housing shortages and rising construction costs are some of the factors driving up prices.
- Higher interest rates. After record-low interest rates in 2021, rising mortgage rates have made borrowing more expensive.
- Stagnant income. Incomes haven’t kept pace with the rising rates of food, housing, and other daily expenses, making it harder for Canadians to save and pay off debt.
- Transportation costs. The average cost of a new car is $63,000, according to AutoTrader.ca. To try and find a better deal, many Canadians are looking for used cars. Increased demand and U.S. tariffs drive up prices.
Debt Relief Solutions
While the state of the Canadian economy might be challenging for many, there is debt help available. To find the best option for you and your family, speak to a Licensed Insolvency Trustee. A LIT can explain the different debt relief options available in Canada, which include:
Debt consolidation
Debt consolidation involves combining several debts into a single payment. You can do this with a loan or a balance transfer credit card that has a lower interest rate than your current debt. By consolidating your debt, you can simplify the debt repayment process and reduce your payments if you can find a lower interest rate. To qualify for a low rate, you typically need to have a good credit score.
Consumer Proposal
In a Consumer Proposal, you work with a Licensed Insolvency Trustee to create an offer to repay your creditors a reduced portion of what you owe. A Proposal is similar to debt consolidation in that you can wrap all your unsecured debts into one affordable monthly payment. Unlike debt consolidation, you can reduce the amount of debt you have to pay.
Personal Bankruptcy
While Bankruptcy might seem daunting, sometimes it’s the right option. The goal of Bankruptcy is not to punish; it’s meant to give honest Canadians who are down on their financial luck a second chance. To file for Bankruptcy, you have to work with a Licensed Insolvency Trustee. Once you fulfill the requirements of your Bankruptcy, you’re released from most of your unsecured debts, and you can start to rebuild your financial life.
Speak With a LIT About Debt Relief in Canada
If you can’t afford groceries and you’re skipping bill payments to make ends meet, it’s time to speak to a Licensed Insolvency Trustee. There’s no need to stress about your debt alone; a LIT can walk you through your debt relief options and help you every step of the way. For a free, no obligation consultation, give us a call at 1-888-371-8900 or complete our online contact form.
