Finance Committee on March 26th, 2026

[Clarke Cross, Director, Government Relations, TransUnion Canada]

Madam Chair, I'm going to open our remarks, if that's okay.

[The Chair, Liberal, Karina Gould]

Go ahead.

[Clarke Cross]

Good morning, Madam Chair. My name is Clarke Cross. I'm the director of government relations for TransUnion Canada. I'm accompanied by my colleague, Matt Fabian, TransUnion's senior director of research and consulting.

We're pleased to be invited here today pursuant to the finance committee's interest in understanding how Canadians are managing credit debt. To help guide the committee and generate discussion today, we've taken the liberty of providing you with a package of data exhibits, which you should have before you now. Before I pass things over to Matt, I want to say a few words about TransUnion.

TransUnion is a leading provider of credit information services. For businesses, we verify consumers' credit applications so that businesses can make accurate decisions about an applicant's creditworthiness and thereby reduce their financial risk. For consumers, we provide resources to help them manage their credit health.

TransUnion maintains information on consumers furnished by data suppliers, mostly financial institutions from across Canada. Importantly for understanding the scope of our testimony today, we do not collect information about income, savings or cash flow.

Without further ado, I'm going to turn things over to Matt, who's going to take you through the numbers.

[Matt Fabian, Senior Director, Research and Consulting, TransUnion Canada]

Thanks, Clarke.

Thank you, Madam Chair.

My remarks draw on comprehensive consumer credit data covering over 30 million credit-active Canadians and reflect conditions through the fourth quarter of 2025.

Household credit debt in Canada continues to grow. The pace of growth has moderated materially compared with the immediate postpandemic period, but we are still seeing continued growth in household debt. As of the fourth quarter of 2025, total outstanding consumer credit debt reached approximately $2.6 trillion: a 4.3% year over year increase. This was broad-based across major credit products and across all risk tiers.

Mortgages remain the dominant component of household debt, with outstanding mortgage balances rising 4.3% year over year to roughly $1.9 trillion, while non-mortgage debt increased 4.4% to approximately $685 billion. Critically, this growth is not driven by an expansion in borrowers—the credit-active population grew only by 1.2%—but rather by large average balances per borrower, particularly in housing, auto finance and revolving credit. This distinction matters, as credit expansion today reflects affordability dynamics and balanced growth rather than broad-based credit loosening.

The recent evolution of household credit in Canada was defined by rapid synchronized increases in both inflation and interest rates, as has been mentioned, the combined impact of which created higher debt servicing costs and forced some households to utilize cash flow away from debt repayment. Crucially, this wallet stress was not evenly distributed. The resulting payment shocks were real but concentrated. At the peak of these pressures, TransUnion estimates that payment shocks contributed to missed payments among approximately 10% of active credit households, while the majority of Canadians continued to demonstrate financial resilience. That 10% was a very significant subset demographically. As has been alluded to, younger consumers and Canadians new to credit tended to have more severe impacts.

Several structural shifts also merit the committee's attention. The Canadian credit landscape is bifurcated, with growth concentrated at the prime and superprime ends of the risk spectrum. Additionally, the demographic composition of credit balances has shifted. Gen Z and millennial consumers combine to hold almost 50% of outstanding debt. Much of this debt, especially among millennials, is mortgage debt. Second, the most significant pressure point has been cash flow burden rather than credit access. Average minimum monthly payments rose 3.5% across all products, led by growing average mortgage payments reaching over $2,500. This underscores meaningful affordability strain, even where credit performance remains technically sound.

Delinquency rates rose steadily through 2024 and started to stabilize in 2025. Mortgage delinquency remains exceptionally low, underpinned by strong equity positions and the mortgage stress test framework in place since 2018. Notably, balance-level delinquency has increased faster than consumer-level delinquency, indicating that while relatively fewer consumers are delinquent, those who are tend to carry larger outstanding balances. This points to concentrated stress rather than broad-based financial stress. Notably, younger borrowers, who carry higher balances with fewer financial reserves, are exhibiting slightly higher rates of delinquency. Younger mortgage holders are particularly exposed, given higher loan balances and the cumulative impact of elevated home prices.

In interpreting delinquency trends, it's also important to acknowledge the role of fraud, which is often embedded within reported credit losses and can therefore be misattributed to consumer financial hardship. Our latest analysis indicates that up to $400 million in annually reported delinquent balances is attributable to fraud rather than genuine consumer hardship, conflating the two risks and mischaracterizing the true state of household financial stress, a distinction that matters for sound policy.

In summary, household credit growth continues but at a moderated pace and with improving stability. Systemic risk remains contained. The majority of Canadian households have shown considerable resilience, but as economic conditions continue to change, we continue to monitor these, especially those stressed segments, and continue to report.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Fabian. We're going to have to end it there. Thank you very much.

We're going to begin now with Mr. Kelly for six minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you.

In my career prior to politics, I read many thousands of reports from both of your organizations during my 21 years in the mortgage business. I thank you for the work that you do for Canadians and for the financial services industry.

I want to talk today about consumer indebtedness. In the officials' statements in the previous panel, they said that they attributed the absence of broad default to households' spending less on other things, to households' refinancing existing debt and to households' exhausting their savings. There is no increase in per capita GDP, so we don't have an increased ability of people to pay. We just have a shuffling of debt responsibility.

I'll let each of you answer this. Do you have data to support that assertion, and can you break down refinancing activity versus...? Well, that would be the one you could see, so perhaps talk about refinancing.

[Sue Hutchison]

Rebecca can take this.

[Rebecca Oakes, Vice-President, Advanced Analytics, Equifax Canada Co.]

I certainly can speak to the data points that we see here at Equifax.

I have a few things to call out.

As Sue mentioned a little at the beginning, the aggregate numbers do sometimes mask what is truly going on behind the actual data underneath.

With regard to your question about refinancing and what's happening, when we look at the mortgage market in particular, we have seen that, yes, although missed payments on mortgages remain quite low across Canada, there are subgroups of that population in which stress is still evident. For example, high-balance mortgages in Ontario and B.C. are at levels that are much higher than we saw before the pandemic. When we look at some of those other elements.... For example, on the younger consumer side of things, we have seen missed payments rising, particularly on products such as credit cards. There definitely is a growing risk across some segments of the population.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Can you get in on that?

[Matt Fabian]

I would largely agree with that. We've seen that mortgage payment shock, as we'll call it, has impacted consumers. We haven't seen, necessarily, delinquencies on the mortgages, but we've seen higher delinquency rates on other products that those mortgage holders own.

Also, I would say that we are seeing compressed.... When we look at our payment data, we do see compressed the ratio of how much payment over the minimum payment a lot of consumers are making.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Mr. Fabian, in your remarks you said that the number of mortgage customers is not growing, that the overall credit is growing but not the number of participants. In other words, the same people are just getting deeper into debt. Is that correct?

[Matt Fabian]

Yes, it's broader than mortgages, but we are seeing the volume of credit participation in Canada start to flatten out as immigration levels drop.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay. You're saying that that's across the board and not just with mortgages.

[Matt Fabian]

Yes, that's correct.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

The number of borrowers is not rising. It's simply that the balances are rising.

[Matt Fabian]

The balances are rising faster. That's correct.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay. What are the implications of that long-term, if incomes are not keeping pace?

[Matt Fabian]

A lot of that debt is mortgage debt. Again, it's the stock-versus-flow conversation that happened a little earlier.

Certainly, if we see increases in non-mortgage balances and non-mortgage delinquency, it becomes a concern, and we are starting to see that in small pockets of consumers across Canada.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay, but even with regard to mortgages, if people who borrowed at record lows in 2021 and are dealing with a higher interest rate environment are coping with that by simply spreading the loan out over a longer period and/or borrowing more—maybe they're doing both, borrowing more and spreading it out over a longer period—at a certain point, that is not sustainable. How many times can a consumer really expect to do that, especially in an environment where per capita GDP is flat and has been flat for 10 years?

[Matt Fabian]

I would say that we haven't seen yet a material increase in that happening. It is a concern.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

All right.

You've talked about the headline number, which actually seems alarming enough to me: 177% debt to income. That's higher than in almost all of our peer countries. It's the highest in the G7. The headline number itself seems alarming, but all of you testified to say that it's actually quite a bit worse than that, because if you subtract the highest quintile of income earners, it's more like...I think the number was 428% debt to income.

Again, incomes need to rise significantly to get out of this. Without rising incomes, this hits a brick wall sooner or later. What concerns do you have about how important it is that we have a more productive economy with higher wages, higher earnings, so that people can grow their earnings into the debt they already have?

[The Chair, Liberal, Karina Gould]

Unfortunately, you're going to have to answer that in another question, potentially, because we have to move on.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Don't I have six minutes?

[The Chair, Liberal, Karina Gould]

Yes. You had six minutes.

We will move on now to Mr. Leitão for six minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Six minutes. Thank you. I will speak very fast. No, no....

Thank you for being here.

It's very interesting data that you have supplied to us. In particular, reinforcing what was said before, Canada's credit market is still functioning well. Most household debt is mortgage debt, and that debt is mostly being serviced on time.

However, there are issues out there, so let's talk about that. You mentioned the K-shaped recovery or economy. We've had many alphabet cycles: the L-shaped recovery, the U shape and the V shape. Now we have the K shape, which I think is a fair description of what is going on, in that the economy has recovered but we are not all benefiting from that recovery. Some segments of the population are indeed in trouble. They are facing high cost of living issues, and they are getting deeper into debt.

I think, from what you and the officials before have said, that something in the range of 7% to 10% of households are the ones on the lower end of the K. They're the ones really experiencing trouble. You see that, I think, in your real-life, real-time data.

First, do you agree with what I've been saying here? If so, what do you suggest we recommend as measures to really focus on that 7% to 10% of households that are getting further into debt?