Finance

The House of Commons Standing Committee on Finance met to study consumer debt. Appearing were Brian Torgunrud and Matthew Boldt from the Department of Finance, Sue Hutchison and Rebecca Oakes from Equifax Canada Co., and Clarke Cross and Matt Fabian from TransUnion Canada.

Brian Torgunrud stated that household debt is elevated but most Canadians continue to meet financial obligations, with arrears and insolvencies broadly in line with historical averages after rising from pandemic-era lows. He noted that households have adjusted to higher interest rates by reducing spending, refinancing, or using savings, and that the department monitors mortgage indebtedness and works with agencies like OSFI and the Bank of Canada. He disagreed with a member's characterization that per capita GDP has been flat for a decade, arguing that wages have outpaced inflation, but acknowledged that productivity gains are needed.

Matthew Boldt explained that the department balances mortgage insurance rules to support home ownership while managing taxpayer risk, and that increasing amortizations from 25 to 30 years can reduce monthly payments. He noted that the government's focus has shifted to supply-side housing policies, such as the Build Canada Homes initiative in budget 2025, and that sound underwriting criteria, including the stress test, have helped borrowers absorb interest rate increases.

Sue Hutchison highlighted that Equifax's real-time data reveals a K-shaped economy, with the lowest-income group having a debt-to-income ratio of 428% compared to 130% for the highest earners, and that aggregate numbers understate stress for vulnerable segments. She recommended regulating buy now, pay later and private mortgage lending to bring invisible debt into the credit reporting system, and advocated for including rental payments in credit files to improve financial inclusion for renters and newcomers.

Rebecca Oakes added that missed payments on mortgages remain low overall, but high-balance mortgages in Ontario and British Columbia show rising stress, and that younger and lower-income consumers are disproportionately affected by cost-of-living increases. She noted that the impact of interest rate changes on mortgage defaults can lag by 12 to 24 months, and that some subgroups continue to see rising missed payments despite aggregate stabilization.

Clarke Cross stated that TransUnion provides credit information to help businesses assess creditworthiness and consumers manage credit health, and that the company does not collect income, savings, or cash flow data. He noted that permissible uses of credit information are established by provincial statutes, including for landlord-tenant screening.

Matt Fabian reported that total consumer credit debt reached $2.6 trillion in Q4 2025, with growth driven by larger balances per borrower rather than new borrowers, and that delinquency rates stabilized in 2025 after rising through 2024. He noted that mortgage delinquency remains low due to strong equity and the stress test, but that younger mortgage holders are more exposed, and that up to $400 million in reported delinquent balances may be attributable to fraud rather than consumer hardship. He recommended early warning signals and financial advice for stressed consumers, and noted that the credit landscape is bifurcated, with prime borrowers moving toward extremes.

A procedural debate occurred when a member moved a motion to cancel the upcoming automatic alcohol tax hike, citing cost-of-living concerns. Another member objected, arguing the motion was partisan and that the meeting should focus on the scheduled study, and moved to adjourn the meeting, which was agreed to.