Finance Committee on April 23rd, 2026

[The Chair, Liberal, Karina Gould]

Good morning, colleagues. I call this meeting to order.

Welcome to meeting number 35 of the House of Commons Standing Committee on Finance. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders.

Before we continue, I would ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio and feedback incidents and to protect the health and safety of all participants, including the interpreters. You will also notice a QR code on the card, which links to a short awareness video.

I would like to remind participants of the following points. For those of you who are participating by video conference, please click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation, either floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

This is a reminder that all comments should be addressed through the chair.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, March 9, 2026, the committee will resume its study of household debt in Canada.

I would like to welcome our witnesses.

We welcome our witness, Mr. Philippe d'Astous, Associate Professor at HEC Montréal, appearing as an individual.

From Cardus, we have Brian Dijkema, president for Canada. From MNP LLP, we have Mr. Grant Bazian, president, and Ms. Sheri Aberback, senior vice-president.

All virtual witnesses have conducted a mandatory sound check, and now we will begin with opening remarks.

Mr. Astous, we will start with you. You have five minutes.

[Philippe d'Astous, Associate Professor, HEC Montréal, As an Individual]

Thank you for inviting me to participate in this study.

My name is Philippe d'Astous. I'm an associate professor and director of the financial education laboratory at HEC Montréal.

As part of my research, I have studied household debt from several angles, including minimum credit card payments, instalment purchases and mortgage payments. One of the findings from my research is that the problem is not just household debt, but the fact that many credit products remain difficult to understand, even for educated consumers. Debt can therefore become problematic if households make credit decisions today without fully understanding their future implications.

I teach a personal finance course as part of the Bachelor of Business Administration program at HEC Montréal, and I’ve noticed that many basic aspects of debt are poorly understood, even by university business students. For example, does the bank charge interest on my credit card when I make only the minimum payment? Are the equal-payment plans I see online really free of charge? As an exercise, we study debt contracts in class to better understand their terms, and it’s clear that reading them often remains a challenge.

To fully understand where we stand with household debt levels, we must also ensure that consumers understand the impact of their financial choices. Otherwise, they may find themselves more vulnerable in the event of future hardships. Using the example of minimum credit card payments, I have shown in my research that there are two types of consumers likely to make the minimum payment and, as a result, end up paying high interest charges: those who cannot afford to pay more, and those who can afford to pay more but may not understand the high cost of interest they incur by making only the minimum payment.

When we examine instalment purchases, my research shows that some households tend to rely on these loans repeatedly, which means they must manage multiple monthly payments, putting them at greater risk of defaulting.

Because it incurs costs, the use of high-interest credit represents a trade-off between consumption today, which is offset by interest costs, and the ability to pay in the future. Households must therefore clearly understand, at the time they take on debt, that their current choices may limit their future financial flexibility, even if they do not lead to bankruptcy.

There are therefore two key takeaways from my findings that could help improve the situation. First, I believe it is important to present the true cost of credit in a clear and simple manner, as well as to highlight the cost incurred when a payment is missed—not just when all payments are made on time.

Second, it remains important to double efforts to teach financial literacy early on so that young consumers—who are the borrowers of tomorrow—are better equipped to understand the consequences of their borrowing decisions. Research shows that education is most effective when it is provided just in time, that is, at the moment when borrowing decisions are being made.

I would like to thank you for your invitation. I will be happy to answer your questions in both official languages.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. d'Astous.

We will continue now with Mr. Dijkema for five minutes, please.

[Brian Dijkema, President, Canada, Cardus]

Thank you, Madam Chair.

Thank you, everyone. Thank you for your work.

My name is Brian Dijkema. I'm the president of Cardus in Canada. Cardus is a think tank that studies the relationships among individuals, markets, the state and civil society. Our goal is to see civil society, markets and the state working together to form a flourishing society.

I'm going to be speaking to you today on the effects of the introduction of online gambling, and particularly sports gambling, on household debt. I'm going to be sharing some data with you that comes from some of our studies, along with a recommendation or two that can help address this challenge.

Online gambling, and particularly sports betting, was introduced in Canada in 2019. It was done through the provinces via an exemption from the federal government to allow the provinces to do that. Today, about one in three young adults gamble online. In Ontario alone, there are about 1.3 million accounts of online gamblers.

Again, to be clear, we're not talking about people betting on a poker game on a Saturday night or anything like that, but people who are betting online. The average player account of the 1.3 million accounts sustains net losses of $283 per month.

The Canadian Centre on Substance Abuse and Addiction says that players should not spend more than 1% of their pre-tax household income. For that number—$283 per month of losses—for that to be true, someone's income would have to be $340,000. As somebody who lives in Ontario, I can assure you that is not the average wage. For the average Ontario household to spend less than 1%, they should be losing no more than $89 per month. In other words, it is more than three times more than the safe allowable limit.

Those who are spending over that allowable limit and exceeding the 1% threshold are 4.3 times as likely to experience financial harm—the harm that Professor d'Astous was referring to—the trade-offs between interest and so on. They're 4.7 times more likely to experience relational harm: divorce, domestic abuse and things like that. They are 3.9 times as likely to experience emotional or psychological harm: depression, anxiety and things like that. They are 4.4 times as likely to experience harm for health problems, so things like substance abuse and so on. That is a huge challenge in Canada.

The Canadian Centre on Substance Abuse and Addiction also reports that of those who are gambling online, almost a quarter of them reported experiencing a high level of gambling-related harms, including reduction of savings, increased credit card debt—the very debt that the professor was speaking about—and challenges with managing their household income.

We have compared it with a regime in which there's no private online gambling and have seen the number of calls that have come in to mental health addictions. We have seen, particularly with young men aged 15 to 24 years, that there has been an increase in calls to the addiction lines by 144% over the last few years to 337%. It is a serious problem.

We have seen that this is actually mirroring empirical evidence that has been done in the United States. I'll share a little bit about that data with you.

In the United States, they have studied the difference between states that have online sports betting. They can see that credit scores actually declined by about 0.3% in states where there are legalized forms of sports betting. In places where there is legalized access to online sports betting, the effect is nearly three times as large. Bankruptcy rates were up 25% to 30%, three to four years after online betting was legalized. We're beginning to see that in Ontario as well and in other places that have legalized it. Debt collections increased by 8% and debt consolidation loans, the loans that people are using to try to manage their debt, increased by 10%. It is a massive problem.

Why is this happening? It's the Stanley Cup playoffs right now. We all hope that the Montreal Canadiens bring the cup back to Canada—at least, I do. The reality is that more and more people watching sports online are being subjected to absolute harassment by people encouraging them to bet. These are often young people seeing sports for their first time and beginning to understand it purely through betting.

One study shows that there are 2.8 references to sports betting every minute during a sports broadcast. On average, about one-fifth of the total broadcast time includes some sort of gambling reference. When you watch the Habs win on Friday, just watch the boards and watch the advertising, you will be subjected to it.

It is a fairly significant account, and it is something that can be done. It is a new and negative effect on Canadian households and on their debt, and it targets a particularly challenging population, that of young men who are having challenges with savings, finding work and so on.

Our encouragement to this committee is to recognize that this is a massive and growing contributor to the problem of debt in Canada, and we should be doing something about it. I would draw your attention to Senator Marty Deacon's bill—

[The Chair, Liberal, Karina Gould]

Mr. Dijkema, please wrap up quickly.

[Brian Dijkema]

I would encourage you to follow that bill and support it if you can.

Thanks so much.

[The Chair, Liberal, Karina Gould]

Thank you. We appreciate your enthusiasm. I noted around the table that there were many excited faces when you talked about the Montreal Canadiens.

I would like to now turn to our witnesses from MNP for a five-minute opening statement.

Thank you.

[Grant Bazian, President, MNP LLP]

Thank you, Madam Chair and members of the committee.

My name is Grant Bazian. I'm the president of MNP Ltd., one of Canada's largest consumer insolvency practices. I'm based in Vancouver, and there's no hope of the Canucks bringing the cup back any time soon.

Beside me is Sheri Aberback, a senior vice-president of MNP Ltd. Sheri is based in Montreal.

Our trustees meet with thousands of Canadians every year, and the trends we see are consistent from coast to coast. As you are aware, household debt in Canada is the highest in the G7, but it is not just a macroeconomic statistic. What we see every day is the reality behind that data: mortgage renewals rising by hundreds or thousands of dollars a month; the cost of living outpacing income; reliance on credit for basic expenses; younger families entering the housing market with record debt; and seniors on fixed incomes who are unable to keep up. These pressures are national and persistent.

Housing is the largest driver of household debt. Many Canadians have no margin for error, and even a small shock—a job loss, an illness or a rate increase—can trigger a crisis. Inflation has slowed, but the cumulative rise in prices has permanently stretched budgets, especially when wages have not kept pace.

At the same time, more Canadians are turning to high-interest credit, which can quickly become a long-term burden. By the time they reach a trustee, many have already maxed out credit cards, taken out high-interest loans, used payday-style products and/or refinanced their homes, sometimes multiple times. These patterns reflect limited alternatives and delayed intervention.

Financial distress is also a mental health issue. Many people we meet are experiencing anxiety, depression and overwhelming stress, often waiting too long to seek help. Moreover, MNP has been conducting a consumer debt index survey with Ipsos for the last seven years, and several clear, recurring trends and concerns have emerged: declining confidence after repeated economic shocks; rising reliance on credit for essentials; a shrinking financial cushion, with many within $200 of insolvency each month; growing emotional strain; seasonal improvements that no longer lift sentiment; delayed financial decisions without improved resilience; and widening vulnerability among younger, lower-income and, increasingly, middle-income Canadians.

Canadians are adapting to chronic strain rather than recovering from it.

The most important insight I can offer is that high household debt reflects financial literacy gaps, lending practices that normalize long-term indebtedness and structural pressures, such as housing costs, inflation and interest rates outpacing incomes.

I will now turn it over to my colleague.

[Sheri Aberback, Senior Vice-President, MNP LLP]

Thank you, Mr. Bazian.

We offer four recommendations. The first is to increase public awareness of federally regulated debt relief options. Clearer public information would prevent reliance on unlicensed, high-fee consultants.

The second recommendation is to strengthen consumer protections around high-interest credit. High-cost products trap households in long-term debt. Stronger disclosure limits on predatory pricing and incentives for lower-cost alternatives would reduce harm.

The third recommendation is to address the housing debt connection. Improve housing affordability through increased supply and reduced barriers to construction will reduce the need for excessive borrowing.

The fourth recommendation is to support practical financial education. Education should focus on real decisions, such as mortgage renewals, repayment strategies, emergency savings, early warning signs and understanding interest. Practical tools build resilience.

In closing, household debt is not just a macroeconomic statistic. It is a daily reality for millions. The insolvency system is a vital safety valve, but it should be a last resort. With earlier intervention, stronger protections and policies addressing root causes, many Canadians could avoid insolvency altogether.

Thank you. We look forward to your questions.

[The Chair, Liberal, Karina Gould]

Thank you to the witnesses.

We'll start now with Mr. Kelly for six minutes.

Please go ahead.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you.

To our MNP witnesses, we have heard repeatedly at this committee that the only thing keeping us from truly spectacular insolvencies, foreclosures and that type of thing is the resilience of Canadians by way of their ongoing refinancing of debt, skipping other necessities and draining savings. Insolvency is a lagging indicator, because people will burn all their savings, skip other expenses and see if they can stretch their debts out for longer periods.

Is this a sustainable way for our economy to sustain these debt loads, especially when mortgage renewals are overwhelmingly resulting in higher payments for consumers because of the timing of when most people got deep into debt?

[Grant Bazian]

That's a very good question.

What we're seeing more is people relying upon high-interest loans and payday-type loans. Prior to COVID, when people came in, they may have had one or two on their statement of affairs, and now they have multiple. To your point, they're using more debt to survive.

Is it sustainable? I think as long as minimum payments are being made and pressure is being put forward on these people, they're going to continue to live in that environment. There will be a tipping point one day when some sort of shock or crisis hits them, whether it's the loss of a job, an illness or a separation or divorce. That will definitely have an adverse effect on their cash flow, and that could be a very strong crisis that would tip them over into an insolvency situation, where they may need our services to do a bankruptcy or a proposal.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

If income loss is the main tipping point or the event most likely to trigger an insolvency, what do you make of the employment figures? We saw 108,000 job losses in February. I don't believe the March numbers are out yet.

What do you make of the rising unemployment and the effect this has on indebted Canadians?

[Grant Bazian]

I would imagine that jobs are created as well, so I don't know how that's going to turn around.

If those people who are losing jobs aren't finding jobs in the near term, they will have to rely upon other types of credit or savings, for sure. For how long that would be sustainable is hard to say, but I would imagine they would probably find jobs in due course, though maybe not at the same level.

Is it sustainable? It's hard to say.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

It was a net loss of 108,000, so those were 108,000 people not finding new jobs.

With respect to your recommendations, and specifically recommendation number three, housing is the main driver of debt, and the pressure of housing, I presume, is a factor in driving people to high interest-rate debt, payday loans, credit cards and this kind of thing.

You had quite a bit to say about the housing supply. Do you have some more you want to add to that recommendation? I think the committee would be happy to hear it.

[Grant Bazian]

There seems to be a shortage of housing, for sure, and people want to keep their houses, if they have them. What they're doing is spending all their time and money trying to keep their house, and as a result, all of their other payments are suffering. When people come to see us, there are two things they like to keep: their houses and their cars.

With a housing shortage, they may be stuck with alternatives, like high rent, and that hurts their cash flow.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

A witness on Monday said that housing starts have gone over the cliff and there's an absence of housing starts in Ontario. There were zero starts last month in the GTA for condominium construction, and all other types of housing starts are down.

How do you anticipate this will affect insolvencies and the indebtedness of Canadians?

[Grant Bazian]

I don't know if it's 100% linked that they can't start a house. They have to live somewhere, so they're probably renting. If there's a shortage of housing, rent may go up. That may be a tipping point for some—if they can't afford the rent—to come see us to help solve their financial problems.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Quickly, with the minute or so I have left, Professor d'Astous, you spoke about plain language contracts, being clearer with Canadians about what they're borrowing and an increase in financial literacy.

Given all of the factors we've heard already today about affordability and the pressure of the cost of living, wages not keeping pace with the cost of living and interest payments on things like mortgages increasing, is there anything, really, other than an increasingly productive economy, that allows for higher wages and better incomes to support people long term?

I support financial literacy and I support plain language contracts, but none of those things are going to solve the cost of living crisis.

[Philippe d'Astous]

Of course. You need to understand, when you get into that contract in the first place, that it's going to limit your future self in the margins of adjustments that you have. I think that's the emphasis I'd like to put here.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Kelly.

We'll continue now with Mr. MacDonald for six minutes.

[Kent MacDonald, Liberal, Cardigan, PE]

Thank you, Madam Chair.

Thank you to the witnesses.

We've seen an evolving theme as we've been doing this study for several weeks now and hearing from a lot of different witnesses. The picture is obviously that there are Canadians struggling with household debt. I think the high inflation that ended about a year and a half ago is starting to offer some relief. I heard the comments that wages aren't keeping up with inflation. Actually, the truth is that wages have exceeded inflation in the last 12 months since Prime Minister Carney came into office. That is what we are seeing.

What I really want to focus on—and am interested in—is Professor d'Astous's talk about behaviour and how it affects people's decisions.

Professor, we're seeing a lot of financial institutions offering instalment-style payments. Even credit cards now with BMO or whomever are offering that you can make the payments over several months. Digital banking platforms are offering special deals. This is something that we weren't subjected to previously. Is this creating more problems for people?

As they break these payments down into smaller amounts, do they make bad choices as consumers? Can you comment on that?

[Philippe d'Astous]

That's a great question. I've studied administrative bank-level data on consumers who use these instalment loans. The instalment loans we had in our data were the old type of loans: You buy a couch and pay for it in instalments, or you buy a TV and pay for it in instalments. One of the findings we had was that, across all types of consumers, they're more likely to get a new loan as soon as the first one expires, whether they have the liquidity or not. What that tells us is that some people rely on these types of loans, even if they perhaps have the liquidity to not rely on these loans. For some reason, they agree to pay high interest to get these loans, and this high interest that they pay on these loans is not very productive. It's money they could use to do other things—maybe increase their education, maybe find a better job—but they're using it to consume.

[Kent MacDonald, Liberal, Cardigan, PE]

I'll move to another topic. You talked about financial literacy. A couple of the witnesses mentioned that financial literacy is something that has been flagged.

We see students entering university today, and it's a different world than it was. If you're as old as me and have grown children.... When I went to school, it was cash. There were no credit cards. There wasn't that risk of making bad choices. Today—and I've lived this with my children—they're managing tuition, rent, credit cards and that first time away from home, and they tend to not have the financial literacy to deal with all of those items at once.

Ms. Aberback and Professor d'Astous, could you comment on what we can do better to get young adults ready to understand financial terms?