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—