For more than two decades, I have been warning individuals about the heightened risk and stress associated with high debt levels and financial bubbles. Unfortunately, many older people are financially uninformed and don’t set a good example for younger people. Worse, many parents and grandparents have encouraged and enabled young people to become heavily indebted. They thought they were helping, but in many cases, their advice was harmful. We are now paying the price for that with interest.
The Bloomberg Nanos Canadian Consumer Confidence Index fell to 46.93 in the week ended April 3, while the expectations index extended its four-week loss to almost 10 points. A reading below 50 indicates net negative views. It was the lowest reading for both indexes since May 2025, when consumers and businesses were still digesting the initial shock of US President Donald Trump’s “Liberation Day” tariffs.
Just 15% of Canadians see a stronger economy six months from now, compared with 27% four weeks ago. See, Canadian Consumer Confidence Hits 11-Month Low as Iran War Drags On.
Food bank usage increased 90% between 2019 and 2024, according to Food Banks Canada. Other social transfers in kind, where Statistics Canada records food bank usage, are up nearly 40% for Canada’s lowest income households over the same period, compared to 28% across all households (RBC report).
Beyond a sluggish economy, rising unemployment, and angst with our largest trading partner, Canadians are the most indebted households of developed economies. Household debt totals $3.1 trillion, equivalent to 100.8% of GDP (Q4 2025).
The US comparison tells the real story. Both countries had similar household debt levels in the early 2000s, but their paths diverged sharply after the 2008 financial crisis. American households went through a sustained deleveraging — paying down debt and rebuilding balance sheets — while Canadian households kept borrowing, largely fuelled by rising home prices and cheap mortgages. Canada’s ratio surpassed the US’s around 2011 and has continued to outpace it since, with Canadian households reaching a peak debt-to-income ratio of 188% in Q3 2022 — higher than the US ever reached, even at the peak of its 2007 housing bubble. (Statistics Canada)
The recent modest decline from that 188% peak reflects the impact of higher interest rates cooling mortgage borrowing, but the debt-to-income ratio rose again to 177.2% in Q4 2025, marking a fifth consecutive quarterly increase as debt growth continued to outpace income.
Record debt levels led Canada into a world-famous housing bubble that is now in its 4th year of deflating, eroding notional equity from household balance sheets while debt levels persist. Deflating stock prices are another depressant of net worth. It will take time, more price deflation and debt retirement to dig our way back to economic health and resiliency. The upside is that we can learn from the experience.
Honest, unvarnished by salespersonship, advocates for financial literacy are rare, but they do exist, and it is never too late to admit past mistakes, repent, and reform behaviours to recover. Everyone who takes the time to learn and understand can help. The discussion below is worth sharing.
Our guest this episode is Doug Hoyes — Co-Founder of Hoyes Michalos (@DebtFreein30) Licensed Insolvency Trustee and one of Canada’s leading experts on debt and personal insolvency. Doug has spent decades helping Canadians navigate financial hardship and is a passionate advocate for ensuring people understand their options and find the right path forward. In this episode, Dave and Doug dive into the world of debt, bankruptcy and consumer proposals — what they are, how they work and when each option might make sense. They break down how Licensed Insolvency Trustees operate, how consumer proposals are negotiated and what actually happens if you file for bankruptcy (what you keep, what you lose and who typically ends up choosing each path). Doug also shares insights into why so many Canadians are struggling with debt today, from inflation and the “K-shaped” economy to mortgage renewals, rising vehicle costs and the financial impact of divorce. Here is a direct video link.
