Evidence of meeting #31 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was credit.
A video is available from Parliament.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Hallan. That concludes your time.
We will continue with Mr. Leitão for five minutes.
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Thank you.
Good morning, gentlemen.
Thank you for coming.
Oh boy, we've talked about a lot of things today so far. We'll continue.
Before I get to some questions—I am a little excited that I finally get to speak—I would start by saying that Canada has a stable, robust and well-regulated financial system. People do worry, and there are reasons to worry about levels of indebtedness, but the system is robust and well-regulated and can handle this pressure.
Here is my first question, if you will. A lot of folks were extremely anxious a few years back about what was then described as the mortgage “Armageddon”. Mortgages were resetting from the incredibly low levels of the pandemic to the levels of 2022-23, and folks were anxious that there would be a huge explosion in mortgage defaults, which did not happen. Could you elaborate a bit on that and why you think that was the case?
Acting Senior Director, Housing Finance, Department of Finance
I would agree with your assessment that the financial sector is very well regulated. The mortgage underwriting criteria that lenders use are very robust. Criteria such as the minimum qualifying rate, also known as the stress test, made sure that borrowers, when they took out mortgage credit, were resilient to some adverse changes in circumstances. I think that was one of the key reasons borrowers were able to absorb the interest rate increases that happened in that 2023 period.
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Yes. Thank you.
You also mentioned earlier that when we look at the mortgage market.... I talk about mortgages because, as was also pointed out, 70% of household debt is mortgage debt. As we all know, behind every mortgage, there's an asset. There's a house. I'll get to that after this, if I have time.
You also mentioned that in the context of rebalancing the housing market, there are supply-side measures and there are demand-side measures, and that now the government is focusing a lot more on supply-side measures. Could you elaborate a bit on that and where that will take us if we continue in the direction of focusing on supply?
Acting Senior Director, Housing Finance, Department of Finance
Yes. Again, I can refer to budget 2025. One of the key themes was supercharging homebuilding across the country, with the focus on restoring affordability by addressing the supply gap.
Just quickly, one of the key measures there was the launch of Build Canada Homes to build affordable housing at scale and to focus primarily on non-market housing. I know that the Department of Housing, Infrastructure and Communities is responsible for leading that initiative.
There are other discussions happening about Build Canada Homes. I'll leave it there, but if you have further questions....
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Mr. Torgunrud, you were mentioning something that I think is really important and we should really understand as we talk about household debt, and that's the difference between stocks and flows when one talks about debt and debt servicing. Your time was up and you couldn't continue.
Could you perhaps elaborate a little on that, on why it's important to really notice that there is a big difference. When one makes comparisons, one has to compare apples to apples.
Senior Director, Economic Analysis and Forecasting, Department of Finance
It's true. I think from a flow-flow perspective, if you're talking about the ability to service debt, debt service ratios are a better metric of that, as well as these metrics that give you some sense of the actual stress that's being reflected in the market. They are much better indicators.
As you mentioned, we have a very sophisticated financial system, a very secure financial system, and that means Canadians have a lot of options for a lot of different types of products and ways to borrow, ways to smooth their consumption over time, which means high debt, per se, is not a bad thing relative to income, necessarily.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Torgunrud, we'll leave it there.
Thank you, Mr. Leitão.
To conclude this hour, I will now give the floor to Mr. Garon for two and a half minutes.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Thank you, Madam Chair.
Gentlemen, since the start of its mandate, the government has put a lot of emphasis on creating a single Canadian economy, reducing interprovincial barriers and the importance of labour mobility. The government has stressed that.
I get the impression that rising house prices could actually reduce labour mobility. I get the sense that some people are trapped in their homes. First, there is the price of houses themselves. Then there's the fact that some people are seeing a drop in the price of their house right now and have a lot of debt tied to the house, which could prevent them from selling. Fixed costs are often proportional to the price. Brokerage fees, welcome taxes and the cost of renovations have increased. I also sense that a lot of people feel somewhat trapped in their homes, and also trapped in their housing, because housing prices are regulated, particularly in Quebec. When you move, the price goes up.
Have you ever assessed the impact that has on labour mobility, on the ability to adapt, change regions or move, among other things? Is that something the department is concerned about? If the department is concerned about it, are there any measures that could be taken to address the problem in part?
Senior Director, Economic Analysis and Forecasting, Department of Finance
I'm not aware of any measures or anything that is undertaken in the department along those lines. I understand what you're saying, that this could potentially be a barrier, but I do not believe that there are any proposed measures to alleviate this.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
I think that could be a good avenue to explore. I want to throw that out there very quickly.
I also get the sense that household incomes in recent years have not kept up with house prices. Aside from all the demographic challenges, does the fact that revenues haven't kept up with price increases to date explain the market adjustment we are seeing now? Does it contribute to that?
Senior Director, Economic Analysis and Forecasting, Department of Finance
I'm sorry. I didn't catch the tail end of the question.
Bloc
Bloc
Jean-Denis Garon Bloc Mirabel, QC
I understand that the interpretation didn't work, that the witness didn't understand the question and that I just lost a minute of my speaking time.
Liberal
The Chair Liberal Karina Gould
You didn't lose a minute of your time; it was 10 seconds.
That concludes the round of questions. Thank you.
I would like to thank our witnesses for this hour.
We will now briefly suspend as we change over to the next hour.
Liberal
The Chair Liberal Karina Gould
We are going to resume the meeting. Thank you very much, and welcome back. I would like to welcome our witnesses for the second half of this meeting.
We have Sue Hutchison, president and chief executive officer of Equifax Canada. Joining her is Rebecca Oakes, vice-president of advanced analytics.
We also have, from TransUnion Canada, Matte Fabian, senior director of research and consulting, and Clarke Cross, director of government relations.
I see that Mr. Garon has a point of order.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Madam Chair, you won't be surprised by the nature of the point of order. In general, things are going smoothly with interpretation and there are no worries. I commend the interpreters for their work. They're doing an amazing job.
I just want to point out to you though that, when you have two and a half minutes, you're a member of the second opposition, and you ask a 30-second question and, because of an issue with interpretation, the witness doesn't hear the question and you have to start over, you've lost 50% of your speaking time on that. In addition, I would like to point out that, if we look at the videos, and I might invite you to do so, all the anglophone members who ask questions of anglophone witnesses don't have that problem and get an immediate answer.
I agree that it's easier when you attend the meeting in person, but today, there's an issue with that. In the last round, the time to ask the question wasn't considered, as well as the time to ask it again. I think that's detrimental. I just wanted to say that and I won't spend an hour on it. There are witnesses and I want to respect the fact that they are here.
Last week, we celebrated the International Day of La Francophonie. Members rise in the House and make a show of saying that the francophonie is important, but you have to live it on a daily basis. For me, it's a question of the official languages.
As a member of Parliament, it is not normal for me to get 10%, 15% or 20% less speaking time when the witness does not speak the same official language as I do, does not understand the question and I have to take 40 seconds to ask it again because there was some interference over which I have no control. I want to make you aware of that.
To conclude, I am not asking for a privilege. I'm not asking for more speaking time than anyone else. I'm not asking to ask more questions than what is stipulated in the Standing Orders or the motion from the start of the legislature. I would however rather not have any less time for reasons that are purely technical and beyond my control and that prevent me, as a francophone, from doing my job as a parliamentarian in accordance with the motion adopted at the beginning of the legislature.
Liberal
The Chair Liberal Karina Gould
Okay. Thank you, Mr. Garon.
I will take that into consideration when we continue with the questions—
Liberal
The Chair Liberal Karina Gould
—and I'll make sure that the witnesses can understand and that you can as well.
Thank you for raising that point of order.
With that, I would like to invite Ms. Hutchison from Equifax Canada to begin. You will have five minutes for your opening statement.
Thank you.
Sue Hutchison President and Chief Executive Officer, Equifax Canada Co.
Thank you very much.
Good afternoon, Madam Chair and members of the committee.
Thank you for inviting me to speak to the committee today.
As a bit of background, Equifax manages the largest consumer data trust in Canada, representing 30 million Canadians and receiving over 200 million records monthly from lenders, government, telcos and other data furnishers. Combined with Canada's largest commercial credit database and Canada's only fraud consortium, we offer a unique vantage point on the Canadian economy.
Every day, financial institutions, telecommunications providers, governments and small businesses rely on our data ecosystem to make critical decisions. From a young newcomer establishing their credit footprint to participate in the Canadian economy to a family managing mortgage renewals in a high-interest environment or a local entrepreneur seeking the capital necessary to drive growth, we securely chronicle the financial life cycle for Canadian people and businesses.
Equifax operates a fully modernized cloud-native architecture with full data resiliency, meaning that data is controlled, processed and stored in Canada. We do not rely on lagging macroeconomic indicators, as our data is real time, allowing us to detect emerging economic trends as they happen.
As we monitor the pulse of the economy, we're also acutely aware of the shadow credit market, which often eludes traditional reporting. Historically high-growth sectors, like “buy now, pay later” and private mortgage lending, operated in a regulatory blind spot for quite a long time. Today, Equifax is leading the change in bringing this invisible debt to light. One of our very important goals at Equifax, and my personal passion, is increasing financial inclusion by leveraging a broader set of alternative data, like rental payments, for example. We're aiming to close these visibility gaps by gathering differentiated data under our regulated framework to complete the picture necessary to increase financial inclusion for consumers and improve access to capital for small and medium-sized enterprises in this country.
As this committee studies household debt, data-driven policy-making has never been more critical, so our goal today is to help ensure that your recommendations are grounded in the most granular and definitive insights.
The way Canadians use and leverage credit has shifted really significantly in recent years. During the pandemic, as we heard in earlier comments, we observed a period of lower credit utilization, allowing many Canadians to reduce household debt and boost savings. The percentage of consumers missing a credit payment dropped by over 35% during this time, hitting its lowest point in mid-2021. However, as we exited that period, the ripple effect of inflation, increased unemployment and rising financial costs resulted in a noticeable impact on credit commitments, and we observed a much more severe impact on certain customer groups, particularly younger and lower-income earners. During 2025, missed payments showed signs of stabilization as the effects of lower financing costs began to materialize. By the end of 2025, the percentage of consumers missing at least one credit payment settled slightly above pre-pandemic levels.
However, these overall numbers conceal an underlying divergence in financial performance, often referred to as the K-shaped economy. This becomes visible only when we disaggregate the data, so the averages I've been listening to do not reveal what's really going on.
Headline measures like the debt-to-income ratio grab attention, but our real-time insights reveal that Canada's credit challenges are far more concentrated and severe than the surface numbers suggest. The debt-to-income ratio across Canada has risen for several consecutive quarters, with the lowest-income group showing debt-to-income ratio of over 428%, compared to 130% for the highest earners.
The high incomes of wealthier populations, which also tend to have a low debt-to-income ratio, tend to skew the overall vantage point, leading headline numbers to severely understate the severity of the problem for certain segments. For context, when we exclude the top quintile of income earners, the debt-to-income ratio is actually over 200%, compared to the headline figure of 173%. This strain is echoed by the banks—
Liberal
President and Chief Executive Officer, Equifax Canada Co.
Sure.
Financial stress is not limited to younger or lower-income consumers. The combined effect of high interest rates on high-balance mortgage renewals in Ontario and B.C. along with the impact of economic conditions on unemployment levels has led to rising—
Liberal
The Chair Liberal Karina Gould
Thank you, Ms. Hutchison. We're going to have to end it there, but I'm sure members will be delighted to ask you more.
We're going to now continue with Mr. Fabian, I believe, from TransUnion.