How record breaking consumer debt is impacting young Canadians

Julian Hough walking to class at St. Lawrence College in Brockville, Ont. Nov. 26, 2024. (Jack Richardson/CTV News Ottawa).

Surveys from two credit bureaus say consumer debt rose to a record $2.5 trillion in the third quarter, as Canadians continue to struggle with high living costs.

Equifax's report says people who borrowed money for the first time in the past 12 to 36 months saw the biggest rise in missed payments, compared to the same group in 2023.

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TransUnion, the other credit bureau, says more gen Z consumers entering the credit market coincided with consumer credit debt rising 4.1 per cent.

There are a variety of reasons Canadians born between 1995 and 2010 are being impacted, according to Marc Rouleau, the Senior Vice President of Doyle Salewski, an insolvency trustee firm in eastern Ontario.

"They're the ones that are being exposed to credit, perhaps for the first time, and experiencing some of these difficulties in the market," he tells CTV News Ottawa.

"We're seeing now in the market that the gen Z generation is the first generation that may not be able to buy a house because it's gotten unaffordable. Prices of houses have skyrocketed, and mortgage rates have gone up."

Rouleau adds that young Canadians are entering the market at a disadvantage, because of how disciplined they need to be with spending.

"If you get over your head and you're living a lifestyle that is unaffordable, it's very difficult to get behind the 8 ball," he explains. "It's very difficult to know what your limit is unless you've set one for yourself."

The student life

Buying a house is the furthest thing from Julian Hough's mind.

The 20-year-old is attending St. Lawrence College in Brockville, Ont. to become a firefighter. He has student loans from the Ontario Student Assistance Program (OSAP), totalling $20,000.

Hough will have to pay $13,000 back to the provincial government, either six months after he finishes school or six months after he gets a full-time job.

"It's nice that you don't have to start paying back until you have a job and you're making some income, so that helps," he says.