Why Ontario is seeing more consumer insolvencies than the rest of Canada

As credit counsellors, this pressure is becoming increasingly visible in the conversations we’re having with clients who are struggling with their monthly debt payments. Often, the problem isn’t that people have stopped paying their bills. It’s that there isn’t enough money left over at the end of the month to keep everything on track. 

The latest insolvency data suggests that more Ontario households are reaching that point. According to the Office of the Superintendent of Bankruptcy (OSB), there were 14,642 consumer insolvencies in Ontario in the second quarter of 2026, an increase of 10.2% from the same quarter a year earlier. In the 12 months leading up to June 2026, Ontario recorded 55,968 consumer insolvencies, up 8.8% from the previous year.

In addition, the data shows the number of filings in Ontario is rising at a faster rate than other provinces. Ontario’s 10.2% increase was higher than the increases recorded in Quebec, Alberta, Manitoba and New Brunswick.

These numbers raise an important question: What financial pressures are making it harder for some Ontario households to keep up with their debts?

Financial pressures facing Ontario households

There isn’t one reason behind rising consumer insolvencies in Ontario. For many, it’s the combined effect of several expenses becoming harder to manage.

“There are often several reasons why a household starts to struggle with debt. Looking at the full financial picture can help explain why someone who has been keeping up with payments may eventually find those payments are no longer affordable,” says Mike Bergeron, a Counselling and Client Services Manager at Credit Canada.

Housing costs

Whether someone owns or rents, a large portion of their income may already be committed to housing, leaving less money for groceries, transportation, debt payments and other expenses.

For homeowners, mortgage payments are only part of the cost. Property taxes, home insurance, utilities, repairs and maintenance can all add to the cost of owning a home. In Ontario, particularly in the Greater Toronto Area (GTA), home prices are high relative to incomes, which means homeowners may also carry larger mortgages compared with their earnings and other regions. When those mortgages come up for renewal at higher interest rates, the resulting increase in payments can put additional pressure on an already tight budget.

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For renters, affordability can be affected by Ontario’s rent-control rules. Units first occupied after November 15, 2018, are generally exempt from the province’s rent increase guideline, meaning some tenants can face significant increases when rent is adjusted each year or when they move to a new unit.

Everyday expenses

Housing isn’t the only cost putting pressure on household budgets. Groceries, transportation, insurance, internet, utilities and other regular expenses can add up quickly.

For Ontario households already carrying higher levels of non-mortgage debt, these expenses can be harder to absorb. The challenge is when several expenses rise at once. If little money is left at the end of the month, an unexpected car repair, medical bill or other emergency may have to go on a credit card or line of credit, adding a new payment to an already tight budget.

These pressures don’t impact every household equally. Income, family size, housing costs and transportation needs can all influence how much room someone has to absorb higher expenses.

Consumer debt

The amount of debt households are carrying is another factor.

Statistics Canada reported that Canadian households were carrying $3.25 trillion in credit-market debt in the first quarter of 2026. According to the data, household debt reached 179.6% of disposable income, meaning Canadian households owed about $1.80 for every $1 of disposable income.

The amount households were spending on debt payments also increased. The household debt-service ratio reached 14.75%, meaning that, on average, households were using about 15 cents of every dollar of disposable income to make required payments on their debt.

These are national figures, not Ontario-specific figures, and they don’t mean that every household has this level of debt. However, they show how debt payments can take up a significant share of household income. As debt builds, it can become harder to pay down balances, particularly when interest charges make up a large portion of the monthly payment.

Ontario’s economic picture

The challenges facing Ontario households are happening at a difficult time for the provincial economy. 

Ontario’s manufacturing sector, including the automotive industry, has been hit by the conflict in the Middle East, tariffs and ongoing uncertainty over Canada-U.S. trade. According to Signal49 Research, Ontario’s economy is expected to grow by just 0.2% in 2026—the lowest forecast across the provinces—due to these pressures.

TD Economics also suggests a weaker job market, high household debt and a slowdown in homebuilding are having an impact.

“Ontario’s economy is facing some of the stiffest headwinds in the country,” wrote Rishi Sondhi, an economist with TD Economics, in an August 2026 analysis. He pointed to weak employment, tariff uncertainty, slow residential construction activity and a wave of higher mortgage renewals.

Still, the picture isn’t entirely negative. Ontario’s inflation rate was 2.0% in June, below the national rate of 2.6%, while hourly wages were growing faster than inflation. Sondhi also noted in his analysis that industries less affected by international trade have continued to hold up relatively well in the province.

For households already dealing with high housing costs and debt payments, however, these broader economic pressures can leave less room to absorb a financial setback. When budgets are already stretched, even a temporary drop in income or increase in expenses can make it difficult to keep up.

Is the Ontario story the same across all cities?

Ontario is a large and diverse province, and the OSB’s local data shows that consumer insolvencies are changing at different rates in different cities.

For example, consumer insolvencies increased 16.6% in Kitchener-Cambridge and 15.1% in St. Catharines-Niagara, compared with 8.4% in Toronto and 6.7% in Hamilton. In London, the number of consumer insolvencies was largely unchanged from the same quarter last year, while Brantford saw a much larger increase of 38.8%.

There is no single factor that explains why insolvencies are rising in one community more quickly than another. Financial pressures can vary from one region to another and broader economic conditions across provinces can affect communities differently. Local housing costs, employment conditions and the industries that support a community can all play a role in insolvency rates.

What does this look like when we’re counselling?

While the statistics show consumer insolvencies are increasing, they don’t show what that financial stress looks like in someone’s day-to-day life.

As certified Credit Counsellors, we speak with people in Ontario and across the country, who are often still working and doing their best to keep up with their bills. One pattern we see is credit being used to pay for expenses that were once covered by regular income. A credit card might be used for groceries or other necessities, while a line of credit covers an unexpected bill. Over time, this can result in several types of debt and multiple monthly payments.

We also speak with people who are making their minimum payments but are frustrated because their balances aren’t going down. Sometimes they come to us thinking they have a budgeting problem, but when we look at the numbers together, it becomes clear that debt payments are taking up too much of their income for the budget to work. 

There can also be a lot of shame around asking for help. Some may wait because they think needing help means they have failed financially. In reality, debt problems can happen to households who are working, making payments, and trying to manage their money responsibly. 

“People often assume someone has to be financially irresponsible to end up in insolvency. What we see is that debt problems are often the result of several pressures building up at the same time,” says Bergeron.

What can people do before they reach insolvency?

An insolvency filing isn’t the first indicator that someone is struggling with debt. There are often signs that appear much earlier.

Losing sleep over money, relying on credit to cover basic monthly expenses, falling behind on bills, or finding that debt balances aren’t going down despite making regular payments can all be signs that finances are becoming harder to manage.

If any of these signs sound familiar, it might be time to consider taking some of the following steps:

• Know your numbers. Add up your total debt, interest rates, minimum payments and monthly expenses. Don’t look only at the balance on your credit card statement. Understanding where your money is going can help identify what’s putting the most pressure on your budget.
• Watch what is happening to your balances. If you’re making payments every month but your debt isn’t going down very much, high interest or growing balances may be a sign that your current repayment approach isn’t working.
• Be careful about borrowing more. Using another credit card, loan, or line of credit may provide short-term relief, but it can add to your monthly payments if the underlying budget problem remains.
• Consider whether a Debt Consolidation Program (DCP) could help. If high interest is making it difficult to get ahead, a DCP may help by combining eligible unsecured debts into one payment and reducing interest. It isn’t right for everyone, so it’s important to consider the full financial picture.
• Ask for help before things become a crisis. Speaking with a certified Credit Counsellor doesn’t mean you have to commit to a particular solution. It can simply help you understand where you stand and what options may be available.

Credit counselling is one way to get help with debt before considering formal insolvency. A credit counsellor can review your income, expenses, and debts with you and explain options that may help, including debt consolidation. Bankruptcy and consumer proposals are different—these are formal legal agreements, handled by a Licensed Insolvency Trustee, to reduce or eliminate certain debt repayment obligations. Understanding the options available can help you decide what may be right for your situation.

Getting help with debt

The rise in consumer insolvencies in Ontario is more complicated than a story about people spending too much or failing to budget.

For some households, it reflects what happens when housing costs, everyday expenses, and debt payments leave little room for an unexpected financial setback. A job change, a major repair, or another unplanned expense can put an already tight budget under more pressure.

That’s why paying attention to the warning signs matter. You don’t have to wait until you’ve missed several payments or are considering bankruptcy to talk to someone about your debt.

“The earlier someone asks for help, the more options they typically have to consider. A first conversation doesn’t commit you to any particular solution,” says Bergeron.

If you’re struggling with debt and need guidance, reach out to a non-profit credit counselling agency like Credit Canada. We can help you understand your finances and make informed decisions about handling debt. Contact us today to speak to a certified Credit Counsellor.

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About Himank Bhatia

Credit counsellor Himank Bhatia helps Canadians achieve their financial goals and is passionate about promoting financial awareness for everyone.

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