The committee was studying household debt in Canada. Appearing were Ronald Butler, a mortgage broker; Peter MacKenzie of the C.D. Howe Institute; Vasiliki Bednar of the Canadian SHIELD Institute; André Bolduc and Wesley Cowan of the Canadian Association of Insolvency and Restructuring Professionals; Maude Pugliese, a sociology professor; and Douglas Hoyes, a licensed insolvency trustee.
Ronald Butler said mortgage renewals are at a record high, with 65% to 70% of renewing borrowers facing payment increases, and that the housing market reflects a K-shaped economy where younger and lower-income Canadians are squeezed. He recommended deregulating housing construction, lowering municipal charges on new builds, and allowing house prices to fall, and he argued that Build Canada Homes will not help young people buy homes because it builds only social housing.
Peter MacKenzie said aggregate household debt is not a systemic crisis, with the debt service ratio easing to 14.5%, but stress is concentrated among younger Canadians and highly leveraged homeowners in large cities. He recommended that federal agencies report on the debt service ratio by demographic group, that the Office of the Superintendent of Bankruptcy distinguish cash-flow insolvency from balance-sheet insolvency, and that federal policy encourage growth of mid-sized cities as alternatives to Toronto and Vancouver.
Vasiliki Bednar said buy now pay later is an invisible layer of household debt, increasingly used for everyday needs like groceries, and that its rise signals a broader prosperity problem where wages have not kept up with costs. She recommended that the committee define buy now pay later as a credit or loan product in legislation and treat rising debt as a signal to address wages, market concentration and housing costs.
André Bolduc and Wesley Cowan said households face pressure from longer auto loans with negative equity, rapid growth of alternative lending like buy now pay later, and rising housing costs, with income volatility from gig work adding strain. They recommended stronger federal-provincial consumer protection alignment, clearer regulation of debt advertising on digital platforms, responsible lending guardrails including limits on auto loans with negative equity, and continued financial literacy efforts.
Maude Pugliese said most Canadians are not in excessive debt, but a minority is, and that excessive debt typically arises from compensatory borrowing after life events like job loss, illness or caregiving, not from poor financial literacy. She recommended enhancing social programs such as child care, parental leave and disability support, improving awareness of benefits during life transitions, and developing affordable short-term credit options for low-income people, noting that banks often exclude them from better offers.
Douglas Hoyes said Canadians are layering debt across more creditors, with the average insolvent person owing over $67,000 to more than 10 creditors, and that insolvency filings are a lagging indicator that will rise over the next one to two years. He recommended that the Canada Revenue Agency engage more pragmatically in consumer proposals to avoid pushing debtors into bankruptcy, and that enforcement against unlicensed debt advisers continue.
The committee agreed to extend the pre-budget consultation portal until May 22 to allow analysts time to produce a report before the summer recess.
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